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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-Q
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OR
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Commission File Number: 1-12579
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OGE ENERGY CORP.
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(Exact name of registrant as specified in its charter)
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Oklahoma
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73-1481638
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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321 North Harvey
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P.O. Box 321
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Oklahoma City, Oklahoma 73101-0321
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(Address of principal executive offices)
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(Zip Code)
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405-553-3000
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(Registrant’s telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
þ
No
o
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
þ
Yes
o
No
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
o
No
þ
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At June 30, 2010, there were 97,372,989 shares of common stock, par value $0.01 per share, outstanding.
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Page
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1
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Item 1.
Financial Statements (Unaudited)
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Condensed
Consolidated Statements of Income
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2
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Condensed
Consolidated Statements of Cash Flows
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3
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Condensed
Consolidated Balance Sheets
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4
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Condensed
Consolidated Statements of Changes in Stockholders’ Equity
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6
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Notes
to Condensed Consolidated Financial Statements
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8
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Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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35
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Item 3.
Quantitative and Qualitative Disclosures About Market Risk
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61
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Item 4.
Controls and Procedures
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62
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Item 1
. Legal Proceedings
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62
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Item 1A
. Risk Factors
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64
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Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
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64
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Item 6
. Exhibits
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65
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66
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Ÿ
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general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and their impact on capital expenditures;
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Ÿ
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the ability of OGE Energy Corp. (collectively, with its subsidiaries, the “Company”) and its subsidiaries to access the capital markets and obtain financing on favorable terms;
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Ÿ
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prices and availability of electricity, coal, natural gas and natural gas liquids, each on a stand-alone basis and in relation to each other;
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Ÿ
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business conditions in the energy and natural gas midstream industries;
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Ÿ
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competitive factors including the extent and timing of the entry of additional competition in the markets served by the Company;
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Ÿ
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unusual weather;
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Ÿ
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availability and prices of raw materials for current and future construction projects;
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Ÿ
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Federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters the Company’s markets;
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Ÿ
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environmental laws and regulations that may impact the Company’s operations;
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Ÿ
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changes in accounting standards, rules or guidelines;
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Ÿ
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the discontinuance of accounting principles for certain types of rate-regulated activities;
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Ÿ
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creditworthiness of suppliers, customers and other contractual parties;
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Ÿ
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the higher degree of risk associated with the Company’s nonregulated business compared with the Company’s regulated utility business; and
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Ÿ
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other risk factors listed in the reports filed by the Company with the Securities and Exchange Commission including those listed in “Item 1A. Risk Factors” and in Exhibit 99.01 to the Company’s 2009 Form 10-K.
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OGE ENERGY CORP.
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||||||||||||
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(Unaudited)
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||||||||||||
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Three Months Ended
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Six Months Ended
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|||||||||||
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June 30,
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June 30,
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|||||||||||
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(In millions, except per share data)
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2010
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2009
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2010
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2009
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||||||||
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OPERATING REVENUES
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||||||||||||
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Electric Utility operating revenues
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$
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512.8
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$
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425.3
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$
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956.8
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$
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762.0
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||||
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Natural Gas Pipeline operating revenues
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374.4
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218.8
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806.2
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488.7
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||||||||
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Total operating revenues
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887.2
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644.1
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1,763.0
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1,250.7
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||||||||
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COST OF GOODS SOLD (exclusive of depreciation and amortization
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||||||||||||
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shown below)
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Electric Utility cost of goods sold
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218.9
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176.4
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457.8
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335.5
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||||||||
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Natural Gas Pipeline cost of goods sold
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287.6
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147.8
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618.8
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341.9
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||||||||
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Total cost of goods sold
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506.5
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324.2
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1,076.6
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677.4
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||||||||
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Gross margin on revenues
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380.7
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319.9
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686.4
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573.3
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||||||||
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Other operation and maintenance
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135.0
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105.6
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258.6
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222.1
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||||||||
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Depreciation and amortization
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71.2
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64.6
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141.5
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127.2
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||||||||
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Impairment of assets
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---
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1.4
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---
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1.4
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Taxes other than income
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23.0
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21.9
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48.0
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44.2
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||||||||
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OPERATING INCOME
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151.5
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126.4
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238.3
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178.4
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OTHER INCOME (EXPENSE)
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Loss in earnings of unconsolidated affiliate
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(1.3)
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---
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(1.3)
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---
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Interest income
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---
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0.4
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---
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1.1
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||||||||
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Allowance for equity funds used during construction
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2.3
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3.9
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4.6
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5.2
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Other income
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3.4
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6.5
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6.5
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13.0
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Other expense
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(3.7)
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(2.7)
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(6.1)
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(5.0)
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Net other income
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0.7
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8.1
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3.7
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14.3
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||||||||
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INTEREST EXPENSE
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Interest on long-term debt
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33.4
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31.9
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67.0
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63.3
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Allowance for borrowed funds used during construction
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(1.0)
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(1.9)
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(2.2)
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(3.0)
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||||||||
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Interest on short-term debt and other interest charges
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1.6
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1.7
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3.3
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4.1
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||||||||
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Interest expense
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34.0
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31.7
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68.1
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64.4
|
||||||||
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INCOME BEFORE TAXES
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118.2
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102.8
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173.9
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128.3
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||||||||
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INCOME TAX EXPENSE
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40.3
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31.9
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70.8
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39.8
|
||||||||
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NET INCOME
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77.9
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70.9
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103.1
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88.5
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||||||||
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Less: Net income attributable to noncontrolling interest
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0.6
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0.4
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1.6
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1.2
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||||||||
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NET INCOME ATTRIBUTABLE TO OGE ENERGY
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$
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77.3
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$
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70.5
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$
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101.5
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$
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87.3
|
||||
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BASIC AVERAGE COMMON SHARES OUTSTANDING
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97.3
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96.5
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97.2
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95.6
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||||||||
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DILUTED AVERAGE COMMON SHARES OUTSTANDING
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98.7
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97.5
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98.6
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96.4
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BASIC EARNINGS PER AVERAGE COMMON SHARE
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ATTRIBUTABLE TO OGE ENERGY COMMON SHAREHOLDERS
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$
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0.79
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$
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0.73
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$
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1.04
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$
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0.91
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||||
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DILUTED EARNINGS PER AVERAGE COMMON SHARE
|
||||||||||||
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ATTRIBUTABLE TO OGE ENERGY COMMON SHAREHOLDERS
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$
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0.78
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$
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0.72
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$
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1.03
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$
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0.91
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||||
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DIVIDENDS DECLARED PER SHARE
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$
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0.3625
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$
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0.3550
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$
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0.7250
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$
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0.7100
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||||
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The accompanying Notes to Condensed Consolidated Financial Statements are an integral part hereof
.
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OGE ENERGY CORP.
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|||||||
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(Unaudited)
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|||||||
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Six Months Ended
|
|||||||
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June 30,
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|||||||
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(In millions)
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2010
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2009
|
|||||
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CASH FLOWS FROM OPERATING ACTIVITIES
|
|||||||
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Net income
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$
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103.1
|
$
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88.5
|
|||
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Adjustments to reconcile net income to net cash provided from
|
|||||||
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operating activities
|
|||||||
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Loss in earnings of unconsolidated affiliate
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1.3
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---
|
|||||
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Depreciation and amortization
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141.5
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127.2
|
|||||
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Impairment of assets
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---
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1.4
|
|||||
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Deferred income taxes and investment tax credits, net
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52.2
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52.9
|
|||||
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Allowance for equity funds used during construction
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(4.6)
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(5.2)
|
|||||
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Loss on disposition and abandonment of assets
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0.9
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0.3
|
|||||
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Stock-based compensation expense
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3.9
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2.8
|
|||||
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Stock-based compensation converted to cash for tax withholding
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(1.6)
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(1.7)
|
|||||
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Price risk management assets
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(4.4)
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6.1
|
|||||
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Price risk management liabilities
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11.4
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(63.0)
|
|||||
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Other assets
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11.7
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4.9
|
|||||
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Other liabilities
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(40.7)
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(39.2)
|
|||||
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Change in certain current assets and liabilities
|
|||||||
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Accounts receivable, net
|
(24.1)
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33.1
|
|||||
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Accrued unbilled revenues
|
(24.4)
|
(26.6)
|
|||||
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Income taxes receivable
|
150.6
|
(27.3)
|
|||||
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Fuel, materials and supplies inventories
|
(28.5)
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(34.4)
|
|||||
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Gas imbalance assets
|
(1.8)
|
3.9
|
|||||
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Fuel clause under recoveries
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(0.6)
|
23.9
|
|||||
|
Other current assets
|
8.9
|
(0.5)
|
|||||
|
Accounts payable
|
4.8
|
(74.3)
|
|||||
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Customer deposits
|
18.3
|
2.6
|
|||||
|
Accrued taxes
|
20.4
|
16.4
|
|||||
|
Accrued interest
|
(7.8)
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10.6
|
|||||
|
Accrued compensation
|
(3.6)
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(3.5)
|
|||||
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Gas imbalance liabilities
|
(4.2)
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(13.2)
|
|||||
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Fuel clause over recoveries
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(50.1)
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118.8
|
|||||
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Other current liabilities
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8.9
|
(17.6)
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|||||
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Net Cash Provided from Operating Activities
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341.5
|
186.9
|
|||||
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CASH FLOWS FROM INVESTING ACTIVITIES
|
|||||||
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Capital expenditures (less allowance for equity funds used during
|
|||||||
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construction)
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(296.6)
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(491.2)
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|||||
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Construction reimbursement
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3.3
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17.6
|
|||||
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Proceeds from sale of assets
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1.6
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0.7
|
|||||
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Other investing activities
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0.1
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---
|
|||||
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Net Cash Used in Investing Activities
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(291.6)
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(472.9)
|
|||||
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CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||
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Retirement of long-term debt
|
(289.2)
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---
|
|||||
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Dividends paid on common stock
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(70.4)
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(67.5)
|
|||||
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(Decrease) increase in short-term debt
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(62.1)
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84.2
|
|||||
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Repayment of line of credit
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(50.0)
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(40.0)
|
|||||
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Issuance of common stock
|
9.8
|
68.7
|
|||||
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Proceeds from line of credit
|
115.0
|
80.0
|
|||||
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Proceeds from long-term debt
|
246.2
|
198.4
|
|||||
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Net Cash (Used in) Provided from Financing Activities
|
(100.7)
|
323.8
|
|||||
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(50.8)
|
37.8
|
|||||
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
58.1
|
174.4
|
|||||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
7.3
|
$
|
212.2
|
|||
|
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part hereof
.
|
|
OGE ENERGY CORP.
|
|||||||
|
June 30,
|
December 31,
|
||||||
|
2010
|
2009
|
||||||
|
(In millions)
|
(Unaudited)
|
||||||
|
ASSETS
|
|||||||
|
CURRENT ASSETS
|
|||||||
|
Cash and cash equivalents
|
$
|
7.3
|
$
|
58.1
|
|||
|
Accounts receivable, less reserve of $1.7 and $2.4, respectively
|
315.5
|
291.4
|
|||||
|
Accrued unbilled revenues
|
81.6
|
57.2
|
|||||
|
Income taxes receivable
|
7.1
|
157.7
|
|||||
|
Fuel inventories
|
140.5
|
118.5
|
|||||
|
Materials and supplies, at average cost
|
84.9
|
78.4
|
|||||
|
Price risk management
|
8.0
|
1.8
|
|||||
|
Gas imbalances
|
5.0
|
3.2
|
|||||
|
Accumulated deferred tax assets
|
37.0
|
39.8
|
|||||
|
Fuel clause under recoveries
|
0.9
|
0.3
|
|||||
|
Prepayments
|
6.4
|
8.7
|
|||||
|
Other
|
3.4
|
11.0
|
|||||
|
Total current assets
|
697.6
|
826.1
|
|||||
|
OTHER PROPERTY AND INVESTMENTS, at cost
|
41.6
|
43.7
|
|||||
|
PROPERTY, PLANT AND EQUIPMENT
|
|||||||
|
In service
|
8,925.8
|
8,617.8
|
|||||
|
Construction work in progress
|
250.5
|
335.4
|
|||||
|
Total property, plant and equipment
|
9,176.3
|
8,953.2
|
|||||
|
Less accumulated depreciation
|
3,119.4
|
3,041.6
|
|||||
|
Net property, plant and equipment
|
6,056.9
|
5,911.6
|
|||||
|
DEFERRED CHARGES AND OTHER ASSETS
|
|||||||
|
Income taxes recoverable from customers, net
|
39.8
|
19.1
|
|||||
|
Benefit obligations regulatory asset
|
341.3
|
357.8
|
|||||
|
Price risk management
|
2.5
|
4.3
|
|||||
|
Unamortized loss on reacquired debt
|
16.0
|
16.5
|
|||||
|
Unamortized debt issuance costs
|
16.7
|
15.3
|
|||||
|
Other
|
81.7
|
72.3
|
|||||
|
Total deferred charges and other assets
|
498.0
|
485.3
|
|||||
|
TOTAL ASSETS
|
$
|
7,294.1
|
$
|
7,266.7
|
|||
|
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part hereof.
|
|
OGE ENERGY CORP.
|
||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Continued)
|
||||||
|
June 30,
|
December 31,
|
|||||
|
2010
|
2009
|
|||||
|
(In millions)
|
(Unaudited)
|
|||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||
|
CURRENT LIABILITIES
|
||||||
|
Short-term debt
|
$
|
112.9
|
$
|
175.0
|
||
|
Accounts payable
|
277.2
|
297.0
|
||||
|
Dividends payable
|
35.3
|
35.1
|
||||
|
Customer deposits
|
93.5
|
85.6
|
||||
|
Accrued taxes
|
55.8
|
37.0
|
||||
|
Accrued interest
|
52.8
|
60.6
|
||||
|
Accrued compensation
|
46.5
|
50.1
|
||||
|
Long-term debt due within one year
|
---
|
289.2
|
||||
|
Price risk management
|
9.6
|
14.2
|
||||
|
Gas imbalances
|
7.8
|
12.0
|
||||
|
Fuel clause over recoveries
|
137.4
|
187.5
|
||||
|
Other
|
41.3
|
32.4
|
||||
|
Total current liabilities
|
870.1
|
1,275.7
|
||||
|
LONG-TERM DEBT
|
2,402.6
|
2,088.9
|
||||
|
DEFERRED CREDITS AND OTHER LIABILITIES
|
||||||
|
Accrued benefit obligations
|
337.5
|
369.3
|
||||
|
Accumulated deferred income taxes
|
1,321.1
|
1,246.6
|
||||
|
Accumulated deferred investment tax credits
|
11.3
|
13.1
|
||||
|
Accrued removal obligations, net
|
175.5
|
168.2
|
||||
|
Price risk management
|
---
|
0.1
|
||||
|
Other
|
56.3
|
44.0
|
||||
|
Total deferred credits and other liabilities
|
1,901.7
|
1,841.3
|
||||
|
Total liabilities
|
5,174.4
|
5,205.9
|
||||
|
COMMITMENTS AND CONTINGENCIES (NOTE 12)
|
||||||
|
STOCKHOLDERS’ EQUITY
|
||||||
|
Common stockholders’ equity
|
902.3
|
887.7
|
||||
|
Retained earnings
|
1,258.7
|
1,227.8
|
||||
|
Accumulated other comprehensive loss, net of tax
|
(62.9)
|
(74.7)
|
||||
|
Total OGE Energy stockholders’ equity
|
2,098.1
|
2,040.8
|
||||
|
Noncontrolling interest
|
21.6
|
20.0
|
||||
|
Total stockholders’ equity
|
2,119.7
|
2,060.8
|
||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
7,294.1
|
$
|
7,266.7
|
||
|
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part hereof.
|
|
OGE ENERGY CORP.
|
||||||
|
(Unaudited)
|
||||||
|
Premium
|
Accumulated
|
|||||
|
on
|
Other
|
|||||
|
Common
|
Capital
|
Retained
|
Comprehensive
|
Noncontrolling
|
||
|
(In millions)
|
Stock
|
Stock
|
Earnings
|
Income (Loss)
|
Interest
|
Total
|
|
Balance at December 31, 2009
|
$ 1.0
|
$ 886.7
|
$ 1,227.8
|
$ (74.7)
|
$ 20.0
|
$ 2,060.8
|
|
Comprehensive income (loss)
|
||||||
|
Net income for first quarter of 2010
|
---
|
---
|
24.2
|
---
|
1.0
|
25.2
|
|
Other comprehensive income (loss), net of tax
|
||||||
|
Defined benefit pension plan and restoration of
|
||||||
|
retirement income plan:
|
||||||
|
Amortization of deferred net loss, net of tax ($1.2
pre-
tax)
|
---
|
---
|
---
|
0.5
|
---
|
0.5
|
|
Defined benefit postretirement plans:
|
||||||
|
Amortization of deferred net loss, net of tax ($1.0
pre-
tax)
|
---
|
---
|
---
|
0.6
|
---
|
0.6
|
|
Amortization of deferred net transition obligation,
net of tax ($0.2 pre-tax)
|
---
|
---
|
---
|
0.2
|
---
|
0.2
|
|
Amortization of prior service cost, net of tax (($0.2)
pre-tax)
|
---
|
---
|
---
|
(0.2)
|
---
|
(0.2)
|
|
Deferred commodity contracts hedging losses, net of tax
|
||||||
|
(($4.3) pre-tax)
|
---
|
---
|
---
|
(2.7)
|
---
|
(2.7)
|
|
Amortization of cash flow hedge, net of tax ($0.1
pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Other comprehensive loss
|
---
|
---
|
---
|
(1.5)
|
---
|
(1.5)
|
|
Comprehensive income (loss)
|
---
|
---
|
24.2
|
(1.5)
|
1.0
|
23.7
|
|
Dividends declared on common stock
|
---
|
---
|
(35.3)
|
---
|
---
|
(35.3)
|
|
Issuance of common stock
|
---
|
6.5
|
---
|
---
|
---
|
6.5
|
|
Balance at March 31, 2010
|
$ 1.0
|
$ 893.2
|
$ 1,216.7
|
$ (76.2)
|
$ 21.0
|
$ 2,055.7
|
|
Comprehensive income
|
||||||
|
Net income for second quarter of 2010
|
---
|
---
|
77.3
|
---
|
0.6
|
77.9
|
|
Other comprehensive income, net of tax
|
||||||
|
Defined benefit pension plan and restoration of
|
||||||
|
retirement income plan:
|
||||||
|
Amortization of deferred net loss, net of tax ($0.8
pre-
tax)
|
---
|
---
|
---
|
0.5
|
---
|
0.5
|
|
Amortization of prior service cost, net of tax ($0.1
pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Defined benefit postretirement plans:
|
||||||
|
Amortization of deferred net loss, net of tax ($0.5
pre-
tax)
|
---
|
---
|
---
|
0.3
|
---
|
0.3
|
|
Amortization of deferred net transition obligation,
net of tax ($0.2 pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Deferred commodity contracts hedging gains, net of tax
|
||||||
|
($20.1 pre-tax)
|
---
|
---
|
---
|
12.3
|
---
|
12.3
|
|
Other comprehensive income
|
---
|
---
|
---
|
13.3
|
---
|
13.3
|
|
Comprehensive income
|
---
|
---
|
77.3
|
13.3
|
0.6
|
91.2
|
|
Dividends declared on common stock
|
---
|
---
|
(35.3)
|
---
|
---
|
(35.3)
|
|
Issuance of common stock
|
---
|
8.1
|
---
|
---
|
---
|
8.1
|
|
Balance at June 30, 2010
|
$ 1.0
|
$ 901.3
|
$ 1,258.7
|
$ (62.9)
|
$ 21.6
|
$ 2,119.7
|
|
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part hereof
.
|
|
OGE ENERGY CORP.
|
||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
’
EQUITY (CONTINUED)
|
||||||
|
(Unaudited)
|
||||||
|
Premium
|
Accumulated
|
|||||
|
on
|
Other
|
|||||
|
Common
|
Capital
|
Retained
|
Comprehensive
|
Noncontrolling
|
||
|
(In millions)
|
Stock
|
Stock
|
Earnings
|
Income (Loss)
|
Interest
|
Total
|
|
Balance at December 31, 2008
|
$ 0.9
|
$ 802.0
|
$ 1,107.6
|
$ (13.7)
|
$ 17.2
|
$ 1,914.0
|
|
Comprehensive income (loss)
|
||||||
|
Net income for first quarter of 2009
|
---
|
---
|
16.8
|
---
|
0.8
|
17.6
|
|
Other comprehensive income (loss), net of tax
|
||||||
|
Defined benefit pension plan and restoration of
|
||||||
|
retirement income plan:
|
||||||
|
Amortization of deferred net loss, net of tax ($1.3
pre-
tax)
|
---
|
---
|
---
|
0.8
|
---
|
0.8
|
|
Defined benefit postretirement plans:
|
||||||
|
Amortization of deferred net loss, net of tax ($0.2
pre-
tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Deferred commodity contracts hedging losses, net of tax
|
||||||
|
(($46.2) pre-tax)
|
---
|
---
|
---
|
(28.3)
|
---
|
(28.3)
|
|
Amortization of cash flow hedge, net of tax ($0.2 pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Other comprehensive loss
|
---
|
---
|
---
|
(27.3)
|
---
|
(27.3)
|
|
Comprehensive income (loss)
|
---
|
---
|
16.8
|
(27.3)
|
0.8
|
(9.7)
|
|
Dividends declared on common stock
|
---
|
---
|
(34.2)
|
---
|
---
|
(34.2)
|
|
Issuance of common stock
|
0.1
|
55.7
|
---
|
---
|
---
|
55.8
|
|
Balance at March 31, 2009
|
$ 1.0
|
$ 857.7
|
$ 1,090.2
|
$ (41.0)
|
$ 18.0
|
$ 1,925.9
|
|
Comprehensive income (loss)
|
||||||
|
Net income for second quarter of 2009
|
---
|
---
|
70.5
|
---
|
0.4
|
70.9
|
|
Other comprehensive income (loss), net of tax
|
||||||
|
Defined benefit pension plan and restoration of
|
||||||
|
retirement income plan:
|
||||||
|
Amortization of deferred net loss, net of tax ($1.3
|
||||||
|
pre-tax)
|
---
|
---
|
---
|
0.7
|
---
|
0.7
|
|
Amortization of prior service cost, net of tax
|
||||||
|
($0.1 pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Defined benefit postretirement plans:
|
||||||
|
Amortization of prior service cost, net of tax
|
||||||
|
($0.1 pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Deferred commodity contracts hedging losses, net of tax
|
||||||
|
(($32.4) pre-tax)
|
---
|
---
|
---
|
(19.8)
|
---
|
(19.8)
|
|
Amortization of cash flow hedge, net of tax ($0.1
pre-tax)
|
---
|
---
|
---
|
0.1
|
---
|
0.1
|
|
Other comprehensive loss
|
---
|
---
|
---
|
(18.8)
|
---
|
(18.8)
|
|
Comprehensive income (loss)
|
---
|
---
|
70.5
|
(18.8)
|
0.4
|
52.1
|
|
Dividends declared on common stock
|
---
|
---
|
(34.4)
|
---
|
---
|
(34.4)
|
|
Issuance of common stock
|
---
|
14.1
|
---
|
---
|
---
|
14.1
|
|
Balance at June 30, 2009
|
$ 1.0
|
$ 871.8
|
$ 1,126.3
|
$ (59.8)
|
$ 18.4
|
$ 1,957.7
|
|
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part hereof
.
|
|
June 30,
|
December 31,
|
|||||
|
(In millions)
|
2010
|
2009
|
||||
|
Regulatory Assets
|
||||||
|
Benefit obligations regulatory asset
|
$
|
341.3
|
$
|
357.8
|
||
|
Income taxes recoverable from customers, net
|
39.8
|
19.1
|
||||
|
Deferred storm expenses
|
32.3
|
28.0
|
||||
|
Unamortized loss on reacquired debt
|
16.0
|
16.5
|
||||
|
Deferred pension plan expenses
|
15.8
|
18.1
|
||||
|
Smart Grid
|
7.7
|
---
|
||||
|
Red Rock deferred expenses
|
7.5
|
7.7
|
||||
|
Fuel clause under recoveries
|
0.9
|
0.3
|
||||
|
Miscellaneous
|
3.0
|
3.9
|
||||
|
Total Regulatory Assets
|
$
|
464.3
|
$
|
451.4
|
||
|
Regulatory Liabilities
|
||||||
|
Accrued removal obligations, net
|
$
|
175.5
|
$
|
168.2
|
||
|
Fuel clause over recoveries
|
137.4
|
187.5
|
||||
|
Miscellaneous
|
10.2
|
7.3
|
||||
|
Total Regulatory Liabilities
|
$
|
323.1
|
$
|
363.0
|
||
|
June 30, 2010
|
||||||||||||||||||||||
|
(In millions)
|
Quoted
Market
Prices in
Active
Market for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total Fair
Value
|
Master
Netting
Agreement
Adjustments
|
A
mounts Held
in Clearing
Broker
Accounts
Reflected in
Other Current
Assets
|
Balance
Sheet
Presentation
|
|||||||||||||||
|
Assets
|
||||||||||||||||||||||
|
Commodity
contracts
|
$
|
14.3
|
$
|
6.4
|
$
|
42.1
|
$
|
62.8
|
$
|
(36.6)
|
$
|
(15.7)
|
$
|
10.5
|
||||||||
|
Gas imbalance
assets (A)
|
---
|
5.0
|
---
|
5.0
|
---
|
---
|
5.0
|
|||||||||||||||
|
Total
|
$
|
14.3
|
$
|
11.4
|
$
|
42.1
|
$
|
67.8
|
$
|
(36.6)
|
$
|
(15.7)
|
$
|
15.5
|
||||||||
|
Liabilities
|
||||||||||||||||||||||
|
Commodity
contracts
|
$
|
13.7
|
$
|
45.8
|
$
|
1.8
|
$
|
61.3
|
$
|
(36.6)
|
$
|
(15.1)
|
$
|
9.6
|
||||||||
|
Gas imbalance
liabilities (A)(B)
|
---
|
3.0
|
---
|
3.0
|
---
|
---
|
3.0
|
|||||||||||||||
|
Total
|
$
|
13.7
|
$
|
48.8
|
$
|
1.8
|
$
|
64.3
|
$
|
(36.6)
|
$
|
(15.1)
|
$
|
12.6
|
||||||||
|
December 31, 2009
|
||||||||||||||||||||||
|
(In millions)
|
Quoted
Market
Prices in
Active
Market for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total Fair
Value
|
Master
Netting
Agreement
Adjustments
|
A
mounts Held
in Clearing
Broker
Accounts
Reflected in
Other Current
Assets
|
Balance
Sheet
Presentation
|
|||||||||||||||
|
Assets
|
||||||||||||||||||||||
|
Commodity
contracts
|
$
|
16.1
|
$
|
6.2
|
$
|
49.0
|
$
|
71.3
|
$
|
(47.9)
|
$
|
(17.3)
|
$
|
6.1
|
||||||||
|
Gas imbalance
assets (C)
|
---
|
3.2
|
---
|
3.2
|
---
|
---
|
3.2
|
|||||||||||||||
|
Total
|
$
|
16.1
|
$
|
9.4
|
$
|
49.0
|
$
|
74.5
|
$
|
(47.9)
|
$
|
(17.3)
|
$
|
9.3
|
||||||||
|
Liabilities
|
||||||||||||||||||||||
|
Commodity
contracts
|
$
|
13.3
|
$
|
49.8
|
$
|
14.7
|
$
|
77.8
|
$
|
(47.9)
|
$
|
(15.6)
|
$
|
14.3
|
||||||||
|
Gas imbalance
liabilities (C)(D)
|
---
|
8.0
|
---
|
8.0
|
---
|
---
|
8.0
|
|||||||||||||||
|
Total
|
$
|
13.3
|
$
|
57.8
|
$
|
14.7
|
$
|
85.8
|
$
|
(47.9)
|
$
|
(15.6)
|
$
|
22.3
|
||||||||
|
Assets
|
Commodity Contracts
|
|||||
|
(In millions)
|
2010
|
2009
|
||||
|
Balance at January 1
|
$
|
49.0
|
$
|
121.2
|
||
|
Total gains or losses
|
||||||
|
Included in other comprehensive income
|
(3.9)
|
(11.1)
|
||||
|
Purchases, issuances, sales and settlements
|
||||||
|
Settlements
|
(4.1)
|
(4.5)
|
||||
|
Balance at March 31
|
$
|
41.0
|
$
|
105.6
|
||
|
Total gains or losses
|
||||||
|
Included in other comprehensive income
|
7.2
|
(34.4)
|
||||
|
Purchases, issuances, sales and settlements
|
||||||
|
Settlements
|
(6.1)
|
(3.9)
|
||||
|
Balance at June 30
|
$
|
42.1
|
$
|
67.3
|
||
|
The amount of total gains or losses for the period included in earnings attributable
|
||||||
|
to the change in unrealized gains or losses relating to assets held at June 30
|
$
|
---
|
$
|
---
|
||
|
Liabilities
|
Commodity Contracts
|
|||||
|
(In millions)
|
2010
|
2009
|
||||
|
Balance at January 1
|
$
|
14.7
|
$
|
---
|
||
|
Total gains or losses
|
||||||
|
Included in other comprehensive income
|
(5.1)
|
---
|
||||
|
Purchases, issuances, sales and settlements
|
||||||
|
Settlements
|
(1.4)
|
---
|
||||
|
Balance at March 31
|
$
|
8.2
|
$
|
---
|
||
|
Total gains or losses
|
||||||
|
Included in other comprehensive income
|
(3.7)
|
---
|
||||
|
Purchases, issuances, sales and settlements
|
||||||
|
Purchases
|
---
|
1.8
|
||||
|
Settlements
|
(2.7)
|
---
|
||||
|
Balance at June 30
|
$
|
1.8
|
$
|
1.8
|
||
|
The amount of total gains or losses for the period included in earnings attributable
|
||||||
|
to the change in unrealized gains or losses relating to liabilities held at June 30
|
$
|
---
|
$
|
---
|
||
|
June 30, 2010
|
December 31, 2009
|
|||||||||||||||||
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||||
|
(In millions)
|
Amount
|
Value
|
Amount
|
Value
|
||||||||||||||
|
Price Risk Management Assets
|
||||||||||||||||||
|
Energy Derivative Contracts
|
$
|
10.5
|
$
|
10.5
|
$
|
6.1
|
$
|
6.1
|
||||||||||
|
Price Risk Management Liabilities
|
||||||||||||||||||
|
Energy Derivative Contracts
|
$
|
9.6
|
$
|
9.6
|
$
|
14.3
|
$
|
14.3
|
||||||||||
|
Long-Term Debt
|
||||||||||||||||||
|
OG&E Senior Notes
|
$
|
1,654.9
|
$
|
1,872.6
|
$
|
1,406.4
|
$
|
1,492.1
|
||||||||||
|
OGE Energy Senior Notes
|
99.6
|
107.4
|
99.5
|
102.6
|
||||||||||||||
|
OG&E Industrial Authority Bonds
|
135.4
|
135.4
|
135.4
|
135.4
|
||||||||||||||
|
Enogex Senior Notes
|
447.7
|
484.9
|
736.8
|
746.7
|
||||||||||||||
|
Enogex Revolving Credit Agreement
|
65.0
|
65.0
|
---
|
---
|
||||||||||||||
|
Ÿ
|
natural gas liquids (“NGL”) put options and NGLs swaps are used to manage Enogex’s NGLs exposure associated with its processing agreements;
|
|
Ÿ
|
natural gas swaps are used to manage Enogex’s keep-whole natural gas exposure associated with its processing operations and Enogex’s natural gas exposure associated with operating its gathering, transportation and storage assets;
|
|
Ÿ
|
natural gas futures and swaps and natural gas commodity purchases and sales are used to manage OGE Energy’s natural gas marketing subsidiary, OGE Energy Resources, Inc.’s (“OERI”), natural gas exposure associated with its storage and transportation contracts; and
|
|
Ÿ
|
natural gas futures and swaps, natural gas options and natural gas commodity purchases and sales are used to manage OERI’s marketing and trading activities.
|
|
Gross Notional
|
|||||
|
Commodity
|
Volume (A)
|
Maturity
|
|||
|
(In millions)
|
|||||
|
Short Financial Swaps/Futures (fixed)
|
NGLs
|
0.3
|
Current
|
||
|
Purchased Financial Options
|
NGLs
|
1.3
|
Current
|
||
|
Purchased Financial Options
|
NGLs
|
0.7
|
Non-Current
|
||
|
Total Purchased Financial Options
|
2.0
|
||||
|
Long Financial Swaps/Futures (fixed)
|
Natural Gas
|
5.7
|
Current
|
||
|
Long Financial Swaps/Futures (fixed)
|
Natural Gas
|
2.6
|
Non-Current
|
||
|
Total Long Financial Swaps/Futures (fixed)
|
8.3
|
||||
|
Short Financial Swaps/Futures (fixed)
|
Natural Gas
|
0.9
|
Current
|
||
|
Short Financial Basis Swaps
|
Natural Gas
|
0.9
|
Current
|
||
|
Gross Notional
|
|||||
|
Commodity
|
Volume (A)
|
Maturity
|
|||
|
(In millions)
|
|||||
|
Short Financial Swaps/Futures (fixed)
|
NGLs
|
0.4
|
Current
|
||
|
Long Financial Swaps/Futures (fixed)
|
NGLs
|
0.4
|
Current
|
||
|
Physical Purchases (B)
|
Natural Gas
|
16.6
|
Current
|
||
|
Physical Purchases (B)
|
Natural Gas
|
5.8
|
Non-Current
|
||
|
Total Physical Purchases
|
22.4
|
||||
|
Physical Sales (B)
|
Natural Gas
|
30.1
|
Current
|
||
|
Physical Sales (B)
|
Natural Gas
|
16.8
|
Non-Current
|
||
|
Total Physical Sales
|
46.9
|
||||
|
Long Financial Swaps/Futures (fixed)
|
Natural Gas
|
34.7
|
Current
|
||
|
Long Financial Swaps/Futures (fixed)
|
Natural Gas
|
1.5
|
Non-Current
|
||
|
Total Long Financial Swaps/Futures (fixed)
|
36.2
|
||||
|
Short Financial Swaps/Futures (fixed)
|
Natural Gas
|
35.2
|
Current
|
||
|
Short Financial Swaps/Futures (fixed)
|
Natural Gas
|
3.0
|
Non-Current
|
||
|
Total Short Financial Swaps/Futures (fixed)
|
38.2
|
||||
|
Purchased Financial Option
|
Natural Gas
|
20.1
|
Current
|
||
|
Sold Financial Option
|
Natural Gas
|
18.8
|
Current
|
||
|
Long Financial Basis Swaps
|
Natural Gas
|
11.1
|
Current
|
||
|
Long Financial Basis Swaps
|
Natural Gas
|
1.5
|
Non-Current
|
||
|
Total Long Financial Basis Swaps
|
12.6
|
||||
|
Short Financial Basis Swaps
|
Natural Gas
|
9.8
|
Current
|
||
|
Short Financial Basis Swaps
|
Natural Gas
|
1.5
|
Non-Current
|
||
|
Total Short Financial Basis Swaps
|
11.3
|
||||
|
(A) Natural gas in MMBtu; NGLs in barrels.
|
|||||
|
(B) Of the natural gas physical purchases and sales volumes not designated as cash flow or fair value hedges, the majority are priced based on a monthly or daily index and the fair value is subject to little or no market price risk.
|
|||||
|
Fair Value
|
|||||||||||||||||
|
Balance Sheet
|
|||||||||||||||||
|
Instrument
|
Commodity
|
Location
|
Assets
|
Liabilities
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||
|
Derivatives Designated as Hedging Instruments
|
|||||||||||||||||
|
Financial Options
|
NGLs
|
Current PRM
|
$
|
26.2
|
$
|
---
|
|||||||||||
|
Non-Current PRM
|
14.4
|
---
|
|||||||||||||||
|
Financial Futures/Swaps
|
NGLs
|
Current PRM
|
0.1
|
0.7
|
|||||||||||||
|
Financial Futures/Swaps
|
Natural Gas
|
Current PRM
|
---
|
23.5
|
|||||||||||||
|
Non-Current PRM
|
---
|
12.2
|
|||||||||||||||
|
Other Current Assets
|
3.1
|
0.1
|
|||||||||||||||
|
Total Gross Derivatives Designated as Hedging Instruments
|
$
|
43.8
|
$
|
36.5
|
|||||||||||||
|
Derivatives Not Designated as Hedging Instruments
|
|||||||||||||||||
|
Financial Futures/Swaps (A)
|
NGLs
|
Current PRM
|
$
|
1.4
|
$
|
1.1
|
|||||||||||
|
Financial Futures/Swaps (B)
|
Natural Gas
|
Current PRM
|
3.0
|
7.2
|
|||||||||||||
|
Other Current Assets
|
11.5
|
14.0
|
|||||||||||||||
|
Physical Purchases/Sales
|
Natural Gas
|
Current PRM
|
1.7
|
1.5
|
|||||||||||||
|
Non-Current PRM
|
0.3
|
---
|
|||||||||||||||
|
Financial Options
|
Natural Gas
|
Other Current Assets
|
1.1
|
1.0
|
|||||||||||||
|
Total Gross Derivatives Not Designated as Hedging Instruments
|
$
|
19.0
|
$
|
24.8
|
|||||||||||||
|
Total Gross Derivatives (C
)
|
$
|
62.8
|
$
|
61.3
|
|||||||||||||
|
(A)
|
The fair value of Financial Futures/Swaps – NGLs not designated as hedging instruments includes derivatives that were previously designated as hedging instruments and subsequently de-designated and off-setting derivatives were entered to close the hedge positions. The referenced derivatives had a fair value as presented in the table above in Current Assets of approximately $1.4 million and Current Liabilities of approximately $1.1 million.
|
|
(B)
|
The fair value of Financial Futures/Swaps – Natural Gas not designated as hedging instruments includes derivatives that were previously designated as hedging instruments and subsequently de-designated and off-setting derivatives were entered to close the hedge positions. The referenced derivatives had a fair value as presented in the table above in Current Assets of approximately $2.1 million and Current Liabilities of approximately $6.8 million.
|
|
(C)
|
See reconciliation of the Company’s total derivatives fair value to the Company’s Condensed Consolidated Balance Sheet at June 30, 2010 (see Note 2).
|
|
Fair Value
|
|||||||||||||||||
|
Balance Sheet
|
|||||||||||||||||
|
Instrument
|
Commodity
|
Location
|
Assets
|
Liabilities
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||
|
Derivatives Designated as Hedging Instruments
|
|||||||||||||||||
|
Financial Options
|
NGLs
|
Current PRM
|
$
|
16.4
|
$
|
---
|
|||||||||||
|
Non-Current PRM
|
23.4
|
---
|
|||||||||||||||
|
Financial Futures/Swaps
|
NGLs
|
Current PRM
|
---
|
6.1
|
|||||||||||||
|
Financial Futures/Swaps
|
Natural Gas
|
Current PRM
|
---
|
14.8
|
|||||||||||||
|
Non-Current PRM
|
---
|
19.7
|
|||||||||||||||
|
Other Current Assets
|
4.6
|
1.2
|
|||||||||||||||
|
Total Gross Derivatives Designated as Hedging Instruments
|
$
|
44.4
|
$
|
41.8
|
|||||||||||||
|
Derivatives Not Designated as Hedging Instruments
|
|||||||||||||||||
|
Financial Futures/Swaps (D)
|
NGLs
|
Current PRM
|
$
|
9.2
|
$
|
8.6
|
|||||||||||
|
Financial Futures/Swaps (E)
|
Natural Gas
|
Current PRM
|
3.6
|
12.3
|
|||||||||||||
|
Non-Current PRM
|
---
|
0.1
|
|||||||||||||||
|
Other Current Assets
|
11.8
|
13.6
|
|||||||||||||||
|
Physical Purchases/Sales
|
Natural Gas
|
Current PRM
|
0.8
|
0.6
|
|||||||||||||
|
Non-Current PRM
|
0.6
|
---
|
|||||||||||||||
|
Financial Options
|
Natural Gas
|
Other Current Assets
|
0.9
|
0.8
|
|||||||||||||
|
Total Gross Derivatives Not Designated as Hedging Instruments
|
$
|
26.9
|
$
|
36.0
|
|||||||||||||
|
Total Gross Derivatives (F
)
|
$
|
71.3
|
$
|
77.8
|
|||||||||||||
|
(D)
|
The entire fair value of Financial Futures/Swaps – NGLs not designated as hedging instruments includes derivatives that were previously designated as hedging instruments and subsequently de-designated with offsetting derivatives to close the hedge positions.
|
||||||||||||||||
|
(E)
|
The fair value of Financial Futures/Swaps – Natural Gas not designated as hedging instruments includes derivatives that were previously designated as hedging instruments and subsequently de-designated with offsetting derivatives to close the hedge positions. The referenced derivatives had a fair value as presented in the table above in Current Assets of approximately $2.9 million and Current Liabilities of approximately $11.7 million.
|
||||||||||||||||
|
(F)
|
See reconciliation of the Company’s total derivatives fair value to the Company’s Condensed Consolidated Balance Sheet at December 31, 2009 (see Note 2).
|
||||||||||||||||
|
Amount of
|
||||||||||||||||||
|
Gain or Loss
|
||||||||||||||||||
|
Amount of
|
Location of Gain or
|
Recognized
|
||||||||||||||||
|
Gain or Loss
|
Loss Recognized in
|
in Income on
|
||||||||||||||||
|
Amount of Gain
|
Reclassified
|
Income on
|
Derivative
|
|||||||||||||||
|
or Loss
|
from
|
Derivative
|
(Ineffective
|
|||||||||||||||
|
Recognized in
|
Location of Gain or
|
Accumulated
|
(Ineffective Portion
|
Portion and
|
||||||||||||||
|
OCI on
|
Loss Reclassified
|
OCI into
|
and Amount
|
Amount
|
||||||||||||||
|
Derivative
|
from Accumulated
|
Income
|
Excluded from
|
Excluded from
|
||||||||||||||
|
(Effective
|
OCI into Income
|
(Effective
|
Effectiveness
|
Effectiveness
|
||||||||||||||
|
Instrument
|
Portion)(A)
|
(Effective Portion)
|
Portion)
|
Testing)
|
Testing)
|
|||||||||||||
|
(In millions)
|
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
|
NGLs Financial Options
|
$
|
10.5
|
Operating Revenues
|
$
|
1.1
|
Operating Revenues
|
$
|
---
|
||||||||||
|
NGLs Financial
|
||||||||||||||||||
|
Futures/Swaps
|
2.0
|
Operating Revenues
|
(0.5)
|
Operating Revenues
|
---
|
|||||||||||||
|
Natural Gas Financial
|
||||||||||||||||||
|
Futures/Swaps
|
---
|
Operating Revenues
|
(8.6)
|
Operating Revenues
|
---
|
|||||||||||||
|
Total
|
$
|
12.5
|
Total
|
$
|
(8.0)
|
Total
|
$
|
---
|
||||||||||
|
(A) The estimated net amount of gains or losses included in Accumulated Other Comprehensive Income at June 30, 2010 that is expected to be reclassified into
|
|
earnings within the next 12 months is a loss of approximately $12.5 million.
|
|
Amount of Gain or
|
||||||||||||||||||
|
Location of Gain or
|
Loss Recognized in
|
|||||||||||||||||
|
Loss Recognized in
|
Income of
|
|||||||||||||||||
|
Income on Derivative
|
Derivative
|
|||||||||||||||||
|
(In millions)
|
||||||||||||||||||
|
Derivatives Not Designated as Hedging Instruments
|
||||||||||||||||||
|
Natural Gas Physical Purchases/Sales
|
Operating Revenues
|
$
|
(3.7)
|
|||||||||||||||
|
Natural Gas Financial Futures/Swaps
|
Operating Revenues
|
(0.6)
|
||||||||||||||||
|
Total
|
$
|
(4.3)
|
||||||||||||||||
|
Amount of
|
||||||||||||||||||
|
Gain or Loss
|
||||||||||||||||||
|
Amount of
|
Location of Gain or
|
Recognized
|
||||||||||||||||
|
Gain or Loss
|
Loss Recognized in
|
in Income on
|
||||||||||||||||
|
Amount of Gain
|
Reclassified
|
Income on
|
Derivative
|
|||||||||||||||
|
or Loss
|
from
|
Derivative
|
(Ineffective
|
|||||||||||||||
|
Recognized in
|
Location of Gain or
|
Accumulated
|
(Ineffective Portion
|
Portion and
|
||||||||||||||
|
OCI on
|
Loss Reclassified
|
OCI into
|
and Amount
|
Amount
|
||||||||||||||
|
Derivative
|
from Accumulated
|
Income
|
Excluded from
|
Excluded from
|
||||||||||||||
|
(Effective
|
OCI into Income
|
(Effective
|
Effectiveness
|
Effectiveness
|
||||||||||||||
|
Instrument
|
Portion)
|
(Effective Portion)
|
Portion)
|
Testing)
|
Testing)
|
|||||||||||||
|
(In millions)
|
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
|
NGLs Financial Options
|
$
|
(23.9)
|
Operating Revenues
|
$
|
1.2
|
Operating Revenues
|
$
|
---
|
||||||||||
|
NGLs Financial
|
||||||||||||||||||
|
Futures/Swaps
|
(20.4)
|
Operating Revenues
|
4.6
|
Operating Revenues
|
---
|
|||||||||||||
|
Natural Gas Financial
|
||||||||||||||||||
|
Futures/Swaps
|
5.9
|
Operating Revenues
|
(12.3)
|
Operating Revenues
|
(0.3)
|
|||||||||||||
|
Total
|
$
|
(38.4)
|
Total
|
$
|
(6.5)
|
Total
|
$
|
(0.3)
|
||||||||||
|
Amount of Gain or
|
||||||||||||||||||
|
Location of Gain or
|
Loss Recognized in
|
|||||||||||||||||
|
Loss Recognized in
|
Income of
|
|||||||||||||||||
|
Income on Derivative
|
Derivative
|
|||||||||||||||||
|
(In millions)
|
||||||||||||||||||
|
Derivatives Not Designated as Hedging Instruments
|
||||||||||||||||||
|
Natural Gas Physical Purchases/Sales
|
Operating Revenues
|
$
|
(2.3)
|
|||||||||||||||
|
Natural Gas Financial Futures/Swaps
|
Operating Revenues
|
1.8
|
||||||||||||||||
|
Total
|
$
|
(0.5)
|
||||||||||||||||
|
Amount of
|
||||||||||||||||||
|
Gain or Loss
|
||||||||||||||||||
|
Amount of
|
Location of Gain or
|
Recognized
|
||||||||||||||||
|
Gain or Loss
|
Loss Recognized in
|
in Income on
|
||||||||||||||||
|
Amount of Gain
|
Reclassified
|
Income on
|
Derivative
|
|||||||||||||||
|
or Loss
|
from
|
Derivative
|
(Ineffective
|
|||||||||||||||
|
Recognized in
|
Location of Gain or
|
Accumulated
|
(Ineffective Portion
|
Portion and
|
||||||||||||||
|
OCI on
|
Loss Reclassified
|
OCI into
|
and Amount
|
Amount
|
||||||||||||||
|
Derivative
|
from Accumulated
|
Income
|
Excluded from
|
Excluded from
|
||||||||||||||
|
(Effective
|
OCI into Income
|
(Effective
|
Effectiveness
|
Effectiveness
|
||||||||||||||
|
Instrument
|
Portion)(A)
|
(Effective Portion)
|
Portion)
|
Testing)
|
Testing)
|
|||||||||||||
|
(In millions)
|
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
|
NGLs Financial Options
|
$
|
11.0
|
Operating Revenues
|
$
|
0.5
|
Operating Revenues
|
$
|
---
|
||||||||||
|
NGLs Financial
|
||||||||||||||||||
|
Futures/Swaps
|
3.3
|
Operating Revenues
|
(1.8)
|
Operating Revenues
|
---
|
|||||||||||||
|
Natural Gas Financial
|
||||||||||||||||||
|
Futures/Swaps
|
(9.9)
|
Operating Revenues
|
(12.0)
|
Operating Revenues
|
0.1
|
|||||||||||||
|
Total
|
$
|
4.4
|
Total
|
$
|
(13.3)
|
Total
|
$
|
0.1
|
||||||||||
|
(A) The estimated net amount of gains or losses included in Accumulated Other Comprehensive Income at June 30, 2010 that is expected to be reclassified into
|
|
earnings within the next 12 months is a loss of approximately $12.5 million.
|
|
Amount of Gain or
|
||||||||||||||||||
|
Location of Gain or
|
Loss Recognized in
|
|||||||||||||||||
|
Loss Recognized in
|
Income of
|
|||||||||||||||||
|
Income on Derivative
|
Derivative
|
|||||||||||||||||
|
(In millions)
|
||||||||||||||||||
|
Derivatives Not Designated as Hedging Instruments
|
||||||||||||||||||
|
Natural Gas Physical Purchases/Sales
|
Operating Revenues
|
$
|
(3.8)
|
|||||||||||||||
|
Natural Gas Financial Futures/Swaps
|
Operating Revenues
|
0.2
|
||||||||||||||||
|
Total
|
$
|
(3.6)
|
||||||||||||||||
|
Amount of
|
||||||||||||||||||
|
Gain or Loss
|
||||||||||||||||||
|
Amount of
|
Location of Gain or
|
Recognized
|
||||||||||||||||
|
Gain or Loss
|
Loss Recognized in
|
in Income on
|
||||||||||||||||
|
Amount of Gain
|
Reclassified
|
Income on
|
Derivative
|
|||||||||||||||
|
or Loss
|
from
|
Derivative
|
(Ineffective
|
|||||||||||||||
|
Recognized in
|
Location of Gain or
|
Accumulated
|
(Ineffective Portion
|
Portion and
|
||||||||||||||
|
OCI on
|
Loss Reclassified
|
OCI into
|
and Amount
|
Amount
|
||||||||||||||
|
Derivative
|
from Accumulated
|
Income
|
Excluded from
|
Excluded from
|
||||||||||||||
|
(Effective
|
OCI into Income
|
(Effective
|
Effectiveness
|
Effectiveness
|
||||||||||||||
|
Instrument
|
Portion)(A)
|
(Effective Portion)
|
Portion)
|
Testing)
|
Testing)
|
|||||||||||||
|
(In millions)
|
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
|
NGLs Financial Options
|
$
|
(33.9)
|
Operating Revenues
|
$
|
3.0
|
Operating Revenues
|
$
|
---
|
||||||||||
|
NGLs Financial
|
||||||||||||||||||
|
Futures/Swaps
|
(25.2)
|
Operating Revenues
|
10.1
|
Operating Revenues
|
---
|
|||||||||||||
|
Natural Gas Financial
|
||||||||||||||||||
|
Futures/Swaps
|
(17.0)
|
Operating Revenues
|
(11.1)
|
Operating Revenues
|
(0.3)
|
|||||||||||||
|
Total
|
$
|
(76.1)
|
Total
|
$
|
2.0
|
Total
|
$
|
(0.3)
|
||||||||||
|
Amount of Gain or
|
||||||||||
|
Location of Gain or
|
Loss Recognized in
|
|||||||||
|
Loss Recognized in
|
Income of
|
|||||||||
|
Income on Derivative
|
Derivative
|
|||||||||
|
(In millions)
|
||||||||||
|
Derivatives Not Designated as Hedging Instruments
|
||||||||||
|
Natural Gas Physical Purchases/Sales
|
Operating Revenues
|
$
|
(10.5)
|
|||||||
|
Natural Gas Financial Futures/Swaps
|
Operating Revenues
|
8.4
|
||||||||
| NGLs Financial Futures/Swaps | Operating Revenues | (0.2) | ||||||||
|
Total
|
$
|
(2.3)
|
||||||||
|
June 30,
|
December 31,
|
|||||
|
(In millions)
|
2010
|
2009
|
||||
|
Defined benefit pension plan and restoration of retirement income plan:
|
||||||
|
Net loss, net of tax (($63.6) and ($65.6) pre-tax, respectively)
|
$
|
(39.0)
|
$
|
(40.0)
|
||
|
Prior service cost, net of tax (($0.9) and ($1.1) pre-tax, respectively)
|
(0.6)
|
(0.7)
|
||||
|
Defined benefit postretirement plans:
|
||||||
|
Net loss, net of tax (($20.3) and ($21.2) pre-tax, respectively)
|
(9.8)
|
(10.7)
|
||||
|
Net transition obligation, net of tax (($0.2) and ($0.6) pre-tax, respectively)
|
(0.1)
|
(0.4)
|
||||
|
Prior service cost, net of tax (($0.4) and ($0.1) pre-tax, respectively)
|
(0.2)
|
---
|
||||
|
Deferred commodity contacts hedging losses, net of tax (($19.7) and ($35.5)
|
||||||
|
pre-tax, respectively)
|
(12.1)
|
(21.7)
|
||||
|
Deferred hedging losses on interest rate swaps, net of tax (($1.7) and ($1.9) pre-
|
||||||
|
tax, respectively)
|
(1.1)
|
(1.2)
|
||||
|
Total accumulated other comprehensive loss, net of tax
|
$
|
(62.9)
|
$
|
(74.7)
|
||
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
June 30,
|
June 30,
|
|||||||||||
|
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||
|
Average Common Shares Outstanding
|
||||||||||||
|
Basic average common shares outstanding
|
97.3
|
96.5
|
97.2
|
95.6
|
||||||||
|
Effect of dilutive securities:
|
||||||||||||
|
Contingently issuable shares (performance units)
|
1.4
|
1.0
|
1.4
|
0.8
|
||||||||
|
Diluted average common shares outstanding
|
98.7
|
97.5
|
98.6
|
96.4
|
||||||||
|
Anti-dilutive shares excluded from EPS calculation
|
---
|
---
|
---
|
---
|
||||||||
|
SERIES
|
DATE DUE
|
AMOUNT
|
||
|
(In millions)
|
||||
|
0.30% - 0.50%
|
Garfield Industrial Authority, January 1, 2025
|
$
|
47.0
|
|
|
0.35% - 0.52%
|
Muskogee Industrial Authority, January 1, 2025
|
32.4
|
||
|
0.33% - 0.55%
|
Muskogee Industrial Authority, June 1, 2027
|
56.0
|
||
|
Total (redeemable during next 12 months)
|
$
|
135.4
|
||
|
Revolving Credit Agreements and Available Cash
|
||||||||
|
Aggregate
|
Amount
|
Weighted-Average
|
||||||
|
Entity
|
Commitment
|
Outstanding (A)
|
Interest Rate
|
Maturity
|
||||
|
(In millions)
|
||||||||
|
OGE Energy (B)
|
$
|
596.0
|
$
|
112.9
|
0.38% (D)
|
December 6, 2012
|
||
|
OG&E (C)
|
389.0
|
9.5
|
---% (D)
|
December 6, 2012
|
||||
|
Enogex (E)
|
250.0
|
65.0
|
0.66% (D)
|
March 31, 2013
|
||||
|
1,235.0
|
187.4
|
0.46%
|
||||||
|
Cash
|
7.3
|
N/A
|
N/A
|
N/A
|
||||
|
Total
|
$
|
1,242.3
|
$
|
187.4
|
0.46%
|
|||
|
(A) Includes direct borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit at June 30, 2010.
(B) This bank facility is available to back up OGE Energy’s commercial paper borrowings and to provide revolving credit borrowings. This bank facility can also be used as a letter of credit facility. At June 30, 2010, there were no outstanding borrowings under this revolving credit agreement and approximately $112.9 million in outstanding commercial paper borrowings.
(C) This bank facility is available to back up OG&E’s commercial paper borrowings and to provide revolving credit borrowings. This bank facility can also be used as a letter of credit facility. At June 30, 2010, there was approximately $9.5 million supporting letters of credit. There were no outstanding borrowings under this revolving credit agreement and no outstanding commercial paper borrowings at June 30, 2010.
(D) Represents the weighted-average interest rate for the outstanding borrowings under the revolving credit agreements and commercial paper borrowings.
(E) This bank facility is available to provide revolving credit borrowings for Enogex. As Enogex’s credit agreement matures on March 31, 2013, borrowings thereunder are classified as long-term debt in the Company’s Condensed Consolidated Balance Sheets.
|
||||||||
|
Pension Plan
|
||||||||||||
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
June 30,
|
June 30,
|
|||||||||||
|
(In millions)
|
2010 (A)
|
2009 (A)
|
2010 (B)
|
2009 (B)
|
||||||||
|
Service cost
|
$
|
4.0
|
$
|
4.5
|
$
|
8.4
|
$
|
9.0
|
||||
|
Interest cost
|
8.1
|
7.9
|
15.9
|
15.7
|
||||||||
|
Expected return on plan assets
|
(10.5)
|
(8.3)
|
(21.2)
|
(16.5)
|
||||||||
|
Amortization of net loss
|
5.5
|
5.9
|
10.6
|
11.8
|
||||||||
|
Amortization of unrecognized prior service cost
|
0.6
|
0.2
|
1.2
|
0.4
|
||||||||
|
Net periodic benefit cost
|
$
|
7.7
|
$
|
10.2
|
$
|
14.9
|
$
|
20.4
|
||||
|
Restoration of Retirement Income Plan
|
|||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
|
(In millions)
|
2010 (A)
|
2009 (A)
|
2010 (B)
|
2009 (B)
|
|||||||||
|
Service cost
|
$
|
0.2
|
$
|
0.2
|
$
|
0.4
|
$
|
0.4
|
|||||
|
Interest cost
|
0.1
|
0.1
|
0.2
|
0.2
|
|||||||||
|
Amortization of net loss
|
0.1
|
---
|
0.2
|
0.1
|
|||||||||
|
Amortization of unrecognized prior service cost
|
0.3
|
0.2
|
0.4
|
0.3
|
|||||||||
|
Net periodic benefit cost
|
$
|
0.7
|
$
|
0.5
|
$
|
1.2
|
$
|
1.0
|
|||||
|
(A)
|
In addition to the $8.4 million and $10.7 million of net periodic benefit cost recognized during the three months ended June 30, 2010 and 2009, respectively, the Company recognized the following:
|
||||||||||||
|
(B)
|
In addition to the $16.1 million and $21.4 million of net periodic benefit cost recognized during the six months ended June 30, 2010 and 2009, respectively, the Company recognized the following:
|
||||||||||||
|
Postretirement Benefit Plans
|
||||||||||||
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
June 30,
|
June 30,
|
|||||||||||
|
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||
|
Service cost
|
$
|
0.9
|
$
|
0.9
|
$
|
2.1
|
$
|
1.7
|
||||
|
Interest cost
|
4.3
|
3.5
|
8.5
|
7.0
|
||||||||
|
Expected return on plan assets
|
(1.8)
|
(1.7)
|
(3.5)
|
(3.3)
|
||||||||
|
Amortization of transition obligation
|
0.7
|
0.7
|
1.4
|
1.4
|
||||||||
|
Amortization of net loss
|
3.4
|
1.3
|
6.1
|
2.5
|
||||||||
|
Amortization of unrecognized prior service cost
|
---
|
0.2
|
---
|
0.5
|
||||||||
|
Net periodic benefit cost
|
$
|
7.5
|
$
|
4.9
|
$
|
14.6
|
$
|
9.8
|
||||
|
Transportation
|
Gathering
|
|||||||||||||
|
Three Months Ended
|
Electric
|
And
|
and
|
Other
|
||||||||||
|
June 30, 2010
|
Utility
|
Storage
|
Processing
|
Marketing
|
Operations
|
Eliminations
|
Total
|
|||||||
|
(In millions)
|
||||||||||||||
|
Operating revenues
|
$
|
512.8
|
$
|
97.1
|
$
|
235.4
|
$
|
189.0
|
$
|
---
|
$
|
(147.1)
|
$
|
887.2
|
|
Cost of goods sold
|
230.8
|
60.9
|
168.6
|
192.9
|
---
|
(146.7)
|
506.5
|
|||||||
|
Gross margin on revenues
|
282.0
|
36.2
|
66.8
|
(3.9)
|
---
|
(0.4)
|
380.7
|
|||||||
|
Other operation and maintenance
|
101.2
|
12.6
|
23.5
|
2.1
|
(3.5)
|
(0.9)
|
135.0
|
|||||||
|
Depreciation and amortization
|
50.6
|
5.4
|
12.5
|
---
|
2.7
|
---
|
71.2
|
|||||||
|
Taxes other than income
|
17.2
|
3.4
|
1.6
|
---
|
0.8
|
---
|
23.0
|
|||||||
|
Operating income (loss)
|
$
|
113.0
|
$
|
14.8
|
$
|
29.2
|
$
|
(6.0)
|
$
|
---
|
$
|
0.5
|
$
|
151.5
|
|
Total assets
|
$
|
5,775.9
|
$
|
1,556.2
|
$
|
907.9
|
$
|
104.5
|
$
|
2,691.6
|
$
|
(3,742.0)
|
$
|
7,294.1
|
|
Transportation
|
Gathering
|
|||||||||||||
|
Three Months Ended
|
Electric
|
And
|
and
|
Other
|
||||||||||
|
June 30, 2009
|
Utility
|
Storage
|
Processing
|
Marketing
|
Operations
|
Eliminations
|
Total
|
|||||||
|
(In millions)
|
||||||||||||||
|
Operating revenues
|
$
|
425.3
|
$
|
101.0
|
$
|
142.3
|
$
|
117.2
|
$
|
---
|
$
|
(141.7)
|
$
|
644.1
|
|
Cost of goods sold
|
188.3
|
60.7
|
98.7
|
116.6
|
---
|
(140.1)
|
324.2
|
|||||||
|
Gross margin on revenues
|
237.0
|
40.3
|
43.6
|
0.6
|
---
|
(1.6)
|
319.9
|
|||||||
|
Other operation and maintenance
|
77.9
|
9.7
|
19.9
|
2.7
|
(3.3)
|
(1.3)
|
105.6
|
|||||||
|
Depreciation and amortization
|
46.0
|
5.3
|
10.6
|
---
|
2.7
|
---
|
64.6
|
|||||||
|
Impairment of assets
|
0.3
|
0.8
|
0.3
|
---
|
---
|
---
|
1.4
|
|||||||
|
Taxes other than income
|
16.3
|
3.2
|
1.5
|
0.1
|
0.8
|
---
|
21.9
|
|||||||
|
Operating income (loss)
|
$
|
96.5
|
$
|
21.3
|
$
|
11.3
|
$
|
(2.2)
|
$
|
(0.2)
|
$
|
(0.3)
|
$
|
126.4
|
|
Total assets
|
$
|
5,161.1
|
$
|
1,565.9
|
$
|
885.9
|
$
|
127.1
|
$
|
2,477.1
|
$
|
(3,212.3)
|
$
|
7,004.8
|
|
Transportation
|
Gathering
|
|||||||||||||
|
Six Months Ended
|
Electric
|
And
|
and
|
Other
|
||||||||||
|
June 30, 2010
|
Utility
|
Storage
|
Processing
|
Marketing
|
Operations
|
Eliminations
|
Total
|
|||||||
|
(In millions)
|
||||||||||||||
|
Operating revenues
|
$
|
956.8
|
$
|
208.2
|
$
|
483.3
|
$
|
434.7
|
$
|
---
|
$
|
(320.0)
|
$
|
1,763.0
|
|
Cost of goods sold
|
481.6
|
127.1
|
348.6
|
437.2
|
---
|
(317.9)
|
1,076.6
|
|||||||
|
Gross margin on revenues
|
475.2
|
81.1
|
134.7
|
(2.5)
|
---
|
(2.1)
|
686.4
|
|||||||
|
Other operation and maintenance
|
195.1
|
23.6
|
44.8
|
4.8
|
(7.6)
|
(2.1)
|
258.6
|
|||||||
|
Depreciation and amortization
|
100.3
|
10.8
|
24.9
|
---
|
5.5
|
---
|
141.5
|
|||||||
|
Taxes other than income
|
34.9
|
7.3
|
3.5
|
0.2
|
2.1
|
---
|
48.0
|
|||||||
|
Operating income (loss)
|
$
|
144.9
|
$
|
39.4
|
$
|
61.5
|
$
|
(7.5)
|
$
|
---
|
$
|
---
|
$
|
238.3
|
|
Total assets
|
$
|
5,775.9
|
$
|
1,556.2
|
$
|
907.9
|
$
|
104.5
|
$
|
2,691.6
|
$
|
(3,742.0)
|
$
|
7,294.1
|
|
Transportation
|
Gathering
|
|||||||||||||
|
Six Months Ended
|
Electric
|
And
|
and
|
Other
|
||||||||||
|
June 30, 2009
|
Utility
|
Storage
|
Processing
|
Marketing
|
Operations
|
Eliminations
|
Total
|
|||||||
|
(In millions)
|
||||||||||||||
|
Operating revenues
|
$
|
762.0
|
$
|
209.3
|
$
|
280.8
|
$
|
309.5
|
$
|
---
|
$
|
(310.9)
|
$
|
1,250.7
|
|
Cost of goods sold
|
359.3
|
126.9
|
194.8
|
304.4
|
---
|
(308.0)
|
677.4
|
|||||||
|
Gross margin on revenues
|
402.7
|
82.4
|
86.0
|
5.1
|
---
|
(2.9)
|
573.3
|
|||||||
|
Other operation and maintenance
|
163.2
|
19.6
|
43.0
|
5.3
|
(6.6)
|
(2.4)
|
222.1
|
|||||||
|
Depreciation and amortization
|
91.5
|
10.0
|
20.7
|
---
|
5.0
|
---
|
127.2
|
|||||||
|
Impairment of assets
|
0.3
|
0.8
|
0.3
|
---
|
---
|
---
|
1.4
|
|||||||
|
Taxes other than income
|
32.4
|
6.8
|
2.8
|
0.3
|
1.9
|
---
|
44.2
|
|||||||
|
Operating income (loss)
|
$
|
115.3
|
$
|
45.2
|
$
|
19.2
|
$
|
(0.5)
|
$
|
(0.3)
|
$
|
(0.5)
|
$
|
178.4
|
|
Total assets
|
$
|
5,161.1
|
$
|
1,565.9
|
$
|
885.9
|
$
|
127.1
|
$
|
2,477.1
|
$
|
(3,212.3)
|
$
|
7,004.8
|
|
Ÿ
|
Pre-approval for system-wide deployment of smart grid technology and authorization for OG&E to begin recovering the costs of the system-wide deployment of smart grid technology through a rider mechanism that will become effective in accordance with the order approving the settlement agreement;
|
|
Ÿ
|
OG&E’s total project costs eligible for recovery (those costs expended or accrued by OG&E prior to the termination of the period authorized by the DOE as eligible for grant funds) shall be capped at $366.4 million (“Smart Grid Cost”), inclusive of the DOE grant award amount. The Smart Grid Cost includes the cost of implementing the Norman, Oklahoma smart grid pilot program previously authorized by the OCC. Under the terms of the settlement, the Smart Grid Cost would be deemed to represent an investment that is fair, just and reasonable and in the public interest and to be prudent and will be recognized in OG&E’s 2013 general rate case;
|
|
Ÿ
|
To the extent that OG&E’s total expenditure for system-wide deployment of smart grid technology during the eligible period exceeds the Smart Grid Cost, OG&E shall be entitled to offer evidence and seek to establish that the excess above the Smart Grid Cost was prudently incurred and any such contention may be addressed in OG&E’s 2013 rate case;
|
|
Ÿ
|
Implementation of the recovery rider would commence with the first billing cycle in July 2010;
|
|
Ÿ
|
Continued utilization of a return on equity previously approved by the OCC for other various recovery riders;
|
|
Ÿ
|
The recovery rider shall be designed to collect, on a levelized basis, the revenue requirement associated with the estimated project cost of $357.4 million and shall be subject to a true-up in 2014 after the recovery rider expires, including a true-up for project costs, if any, in excess of $357.4 million but less than the Smart Grid Cost. Any over/under recovery remaining will be passed or credited through OG&E’s fuel adjustment clause;
|
|
Ÿ
|
OG&E guarantees that customers will receive the benefit of certain operations and maintenance cost reductions resulting from the smart grid deployment as a credit to the recovery rider;
|
|
Ÿ
|
Beginning January 1, 2011, OG&E shall make available the smart grid web portal to all customers having a smart meter. OG&E shall expend funds to educate customers regarding the best use of the information available on the portal. In addition, OG&E shall make available to all customers who do not have internet access the opportunity to receive a monthly home energy report. This report shall be made available, free of charge, to customers eligible for the Company’s Low Income Home Energy Assistance Program and/or Senior Citizen program who are without internet service. The incremental costs for web portal access, education and the providing of home energy reports free of charge are to be accumulated as a regulatory asset in an amount up to $6.9 million and recovered in base rates beginning in 2014;
|
|
Ÿ
|
The stranded costs associated with OG&E’s existing meters which are being replaced by smart meters will be accumulated in a regulatory asset and recovered in base rates beginning in 2014; and
|
|
Ÿ
|
OG&E will file an application with the APSC related to the deployment of smart grid technology by the end of 2010.
|
|
Ÿ
|
Authorization for OG&E to begin recovering the costs of Crossroads through a rider mechanism that will be effective until new rates are implemented after OG&E’s 2013 general rate case;
|
|
Ÿ
|
Continued utilization of a return on equity previously approved by the OCC for other various recovery riders, subject to adjustment
in the future to reflect the return on equity authorized in subsequent general rate cases
;
|
|
Ÿ
|
OG&E’s capital costs for which it is entitled recovery for a 197.8 MW wind farm (“Capped Investment Amount”) is $407.7 million;
|
|
Ÿ
|
To the extent OG&E’s total investment in Crossroads exceeds the Capped Investment Amount, OG&E shall be entitled to offer evidence and seek to establish that the excess above the Capped Investment Amount was prudently incurred and should be included in OG&E’s rate base;
|
|
Ÿ
|
If the three-year rolling average of Crossroads megawatt-hours (“MWH”) of production (including a credit for energy not produced due to curtailments or other events caused by system emergencies, force majeure events, or transmission system issues) falls below 712,844 MWHs, OG&E shall file testimony demonstrating the appropriate operation of Crossroads as part of its fuel cost recovery filing; and
|
|
Ÿ
|
OG&E has the opportunity to expand Crossroads by an additional 29.7 MWs (12 additional turbines). If the pending Southwest Power Pool (“SPP”) interconnection study concludes on or before September 1, 2010, that these additional turbines can be interconnected at incremental costs below $4.7 million, the costs and associated recovery for these additional turbines shall be included in the Crossroads rider, and the Capped Investment Amount and the three-year rolling average of MWH production will be adjusted to approximately $469.7 million and 819,879 MWHs, respectively.
|
|
Ÿ
|
an increase in net income at OG&E of approximately $3.6 million or 6.4 percent, or $0.03 per diluted share of the Company’s common stock, primarily due to a higher gross margin on revenues (“gross margin”) mainly due to rate increases and riders partially offset by higher other operation and maintenance expense;
|
|
Ÿ
|
an increase in net income at Enogex of approximately $6.3 million or 39.4 percent, or $0.07 per diluted share of the Company’s common stock, primarily due to a higher gross margin mainly due to higher processing spreads, higher natural gas liquids (“NGL”) prices and volumes and higher natural gas prices and volumes partially offset by higher other operation and maintenance expense; and
|
|
Ÿ
|
an increase in the net loss at OGE Energy Resources, Inc. (“OERI”) of approximately $2.4 million, or $0.03 per diluted share of the Company’s common stock, primarily due to a lower gross margin partially offset by a higher income tax benefit.
|
|
Ÿ
|
an increase in net income at OG&E of approximately $3.5 million or 6.1 percent, or $0.02 per diluted share of the Company’s common stock, primarily due to a higher gross margin mainly due to rate increases and riders, cooler weather in the first quarter of 2010 and warmer weather in the second quarter of 2010 partially offset by higher other operation and maintenance expense and higher income tax expense mainly attributable to the elimination of the tax deduction for the Medicare Part D subsidy (discussed in Note 6 of Notes to Condensed Consolidated Financial Statements);
|
|
Ÿ
|
an increase in net income at Enogex of approximately $18.3 million or 58.3 percent, or $0.17 per diluted share of the Company’s common stock, primarily due to a higher gross margin mainly due to higher processing spreads, higher NGLs prices and volumes and higher natural gas prices and volumes partially offset by higher income tax expense mainly attributable to the elimination of the tax deduction for the Medicare Part D subsidy (discussed in Note 6 of Notes to Condensed Consolidated Financial Statements);
|
|
Ÿ
|
an increase in the net loss at OGE Energy of approximately $2.4 million, or $0.02 per diluted share of the Company’s common stock, primarily due to higher income tax expense mainly attributable to the elimination of the tax deduction for the Medicare Part D subsidy (discussed in Note 6 of Notes to Condensed Consolidated Financial Statements) partially offset by lower interest expense primarily due to lower average commercial paper borrowings in the first half of 2010; and
|
|
Ÿ
|
an increase in the net loss at OERI of approximately $4.4 million, or $0.05 per diluted share of the Company’s common stock, primarily due to a lower gross margin partially offset by a higher income tax benefit.
|
|
Ÿ
|
Excludes a one-time, non-cash charge recorded in March 2010 of approximately $11.4 million, or $0.11 per average diluted share, related to the elimination of the tax deduction for the Medicare Part D subsidy. Approximately $7.0 million is related to OG&E, approximately $2.0 million is related to Enogex and approximately $2.4 million is related to the holding company.
|
|
Ÿ
|
Includes a projected increase for the remainder of 2010 in income tax expense of approximately $2.3 million, or $0.02 per average diluted share, related to the elimination of the tax deduction for the Medicare Part D subsidy. Approximately $1.9 million is related to OG&E, approximately $0.2 million is related to Enogex and approximately $0.2 million is related to the holding company.
|
|
Ÿ
|
An effective tax rate of approximately 33 percent up from the previous guidance of 29 percent primarily a result of lower than previously projected investment and production tax credits at OG&E.
The projected effective tax rate excludes the approximately $11.4 million charge related to the Medicare Part D subsidy; and
|
|
Ÿ
|
A projected loss at the holding company between $11 million and $13 million, or $0.11 to $0.13 per average diluted share, up from the previous projected loss between $7 million and $9 million, or $0.07 to $0.09 per average diluted share. The increase in the projected loss at the holding company is primarily due to lower than previously estimated revenues in the marketing business associated with various transportation contracts and the write-off of costs associated with the Tallgrass joint venture.
|
|
Ÿ
|
Allowance for equity funds used during construction (“AEFUDC”) income of approximately $15 million up from the previous guidance of $5 million primarily as a result of OCC approval of the Crossroads wind farm; and
|
|
Ÿ
|
An effective tax rate of approximately 31 percent up from the previous guidance of 27 percent primarily as a result of lower investment and production tax credits than previously projected.
The projected effective tax rate excludes the approximately $7.0 million charge related to the Medicare Part D subsidy.
|
|
Ÿ
|
Assumed increase of between 8 percent and 10 percent in gathered volumes over 2009 compared to the previous guidance of an increase of between 5 percent and 7 percent;
|
|
Ÿ
|
Assumed increase of between 15 percent and 17 percent in inlet processing volumes over 2009 compared to the previous guidance of an increase of between 10 percent and 12 percent;
|
|
Ÿ
|
Ethane rejection in the processing business for the remainder of the year; and
|
|
Ÿ
|
Operating expenses of approximately $230 million to $240 million, up from the previous guidance of between $220 million to $230 million, primarily as a result of increased pipeline integrity and maintenance projects in the transportation business.
|
|
(In millions)
|
Twelve Months Ended December 31, 2010
|
||||||||||||||||
|
OG&E
|
Enogex
|
Holding Company
|
Consolidated
|
||||||||||||||
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
||||||||||
|
Ongoing earnings (loss)
|
$
|
207.0
|
$
|
217.0
|
$
|
63.0
|
$
|
85.0
|
$
|
(13.0)
|
$
|
(11.0)
|
$
|
265.0
|
$
|
290.0
|
|
|
Medicare Part D tax subsidy
|
(7.0)
|
(7.0)
|
(2.0)
|
(2.0)
|
(2.4)
|
(2.4)
|
(11.4)
|
(11.4)
|
|||||||||
|
Projected GAAP net income
|
$
|
200.0
|
$
|
210.0
|
$
|
61.0
|
$
|
83.0
|
$
|
(15.4)
|
$
|
(13.4)
|
$
|
253.6
|
$
|
278.6
|
|
|
Twelve Months Ended December 31, 2010
|
|||||||||||||||||
|
OG&E
|
Enogex
|
Holding Company
|
Consolidated
|
||||||||||||||
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
||||||||||
|
Ongoing EPS
|
$
|
2.10
|
$
|
2.20
|
$
|
0.64
|
$
|
0.86
|
$
|
(0.13)
|
$
|
(0.11)
|
$
|
2.70
|
$
|
2.95
|
|
|
Medicare Part D tax subsidy
|
(0.07)
|
(0.07)
|
(0.02)
|
(0.02)
|
(0.02)
|
(0.02)
|
(0.11)
|
(0.11)
|
|||||||||
|
Projected GAAP EPS
|
$
|
2.03
|
$
|
2.13
|
$
|
0.62
|
$
|
0.84
|
$
|
(0.15)
|
$
|
(0.13)
|
$
|
2.59
|
$
|
2.84
|
|
|
Twelve Months Ended
|
|||
|
(In millions)
|
December 31, 2010 (A)
|
||
|
Ongoing net income attributable to Enogex LLC
|
$
|
85.0
|
|
|
Add:
|
|||
|
Interest expense, net
|
33.0
|
||
|
Income tax expense
|
49.0
|
||
|
Depreciation and amortization
|
69.0
|
||
|
EBITDA
|
$
|
236.0
|
|
|
(A)
|
At the top end of Enogex’s earnings assumptions for 2010.
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
June 30,
|
June 30,
|
|||||||||||
|
(In millions, except per share data)
|
2010
|
2009
|
2010
|
2009
|
||||||||
|
Operating income
|
$
|
151.5
|
$
|
126.4
|
$
|
238.3
|
$
|
178.4
|
||||
|
Net income attributable to OGE Energy
|
$
|
77.3
|
$
|
70.5
|
$
|
101.5
|
$
|
87.3
|
||||
|
Basic average common shares outstanding
|
97.3
|
96.5
|
97.2
|
95.6
|
||||||||
|
Diluted average common shares outstanding
|
98.7
|
97.5
|
98.6
|
96.4
|
||||||||
|
Basic earnings per average common share attributable to
|
||||||||||||
|
OGE Energy common shareholders
|
$
|
0.79
|
$
|
0.73
|
$
|
1.04
|
$
|
0.91
|
||||
|
Diluted earnings per average common share attributable to
|
||||||||||||
|
OGE Energy common shareholders
|
$
|
0.78
|
$
|
0.72
|
$
|
1.03
|
$
|
0.91
|
||||
|
Dividends declared per share
|
$
|
0.3625
|
$
|
0.3550
|
$
|
0.7250
|
$
|
0.7100
|
||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
|
(In millions)
|
2010
|
2009
|
2010
|
2009
|
|||||||||
|
OG&E (Electric Utility)
|
$
|
113.0
|
$
|
96.5
|
$
|
144.9
|
$
|
115.3
|
|||||
|
Enogex (Natural Gas Pipeline)
|
|||||||||||||
|
Transportation and storage
|
14.8
|
21.3
|
39.4
|
45.2
|
|||||||||
|
Gathering and processing
|
29.2
|
11.3
|
61.5
|
19.2
|
|||||||||
|
OERI (Natural Gas Marketing)
|
(6.0)
|
(2.2)
|
(7.5)
|
(0.5)
|
|||||||||
|
Other Operations (A)
|
0.5
|
(0.5)
|
---
|
(0.8)
|
|||||||||
|
Consolidated operating income
|
$
|
151.5
|
$
|
126.4
|
$
|
238.3
|
$
|
178.4
|
|||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
|
(Dollars in millions)
|
2010
|
2009
|
2010
|
2009
|
|||||||||
|
Operating revenues
|
$
|
512.8
|
$
|
425.3
|
$
|
956.8
|
$
|
762.0
|
|||||
|
Cost of goods sold
|
230.8
|
188.3
|
481.6
|
359.3
|
|||||||||
|
Gross margin on revenues
|
282.0
|
237.0
|
475.2
|
402.7
|
|||||||||
|
Other operation and maintenance
|
101.2
|
77.9
|
195.1
|
163.2
|
|||||||||
|
Depreciation and amortization
|
50.6
|
46.0
|
100.3
|
91.5
|
|||||||||
|
Impairment of assets
|
---
|
0.3
|
---
|
0.3
|
|||||||||
|
Taxes other than income
|
17.2
|
16.3
|
34.9
|
32.4
|
|||||||||
|
Operating income
|
113.0
|
96.5
|
144.9
|
115.3
|
|||||||||
|
Interest income
|
---
|
0.3
|
---
|
0.8
|
|||||||||
|
Allowance for equity funds used during construction
|
2.3
|
3.9
|
4.6
|
5.2
|
|||||||||
|
Other income
|
0.8
|
4.2
|
3.3
|
8.8
|
|||||||||
|
Other expense
|
0.4
|
0.7
|
1.0
|
1.2
|
|||||||||
|
Interest expense
|
25.2
|
23.2
|
49.4
|
47.5
|
|||||||||
|
Income tax expense
|
30.5
|
24.6
|
41.2
|
23.7
|
|||||||||
|
Net income
|
$
|
60.0
|
$
|
56.4
|
$
|
61.2
|
$
|
57.7
|
|||||
|
Operating revenues by classification
|
|||||||||||||
|
Residential
|
$
|
207.7
|
$
|
167.6
|
$
|
398.9
|
$
|
303.9
|
|||||
|
Commercial
|
132.0
|
112.3
|
233.0
|
191.7
|
|||||||||
|
Industrial
|
52.8
|
43.0
|
98.3
|
75.8
|
|||||||||
|
Oilfield
|
40.4
|
33.2
|
76.0
|
62.1
|
|||||||||
|
Public authorities and street light
|
50.5
|
41.3
|
90.0
|
72.8
|
|||||||||
|
Sales for resale
|
14.5
|
12.0
|
31.2
|
24.7
|
|||||||||
|
Provision for rate refund
|
---
|
(0.4)
|
---
|
(0.6)
|
|||||||||
|
System sales revenues
|
497.9
|
409.0
|
927.4
|
730.4
|
|||||||||
|
Off-system sales revenues (A)
|
7.5
|
8.6
|
13.9
|
14.5
|
|||||||||
|
Other
|
7.4
|
7.7
|
15.5
|
17.1
|
|||||||||
|
Total operating revenues
|
$
|
512.8
|
$
|
425.3
|
$
|
956.8
|
$
|
762.0
|
|||||
|
MWH (B) sales by classification (in millions)
|
|||||||||||||
|
Residential
|
2.082
|
2.069
|
4.426
|
4.063
|
|||||||||
|
Commercial
|
1.754
|
1.704
|
3.163
|
3.090
|
|||||||||
|
Industrial
|
0.966
|
0.861
|
1.857
|
1.710
|
|||||||||
|
Oilfield
|
0.756
|
0.720
|
1.481
|
1.452
|
|||||||||
|
Public authorities and street light
|
0.784
|
0.759
|
1.426
|
1.412
|
|||||||||
|
Sales for resale
|
0.351
|
0.309
|
0.679
|
0.620
|
|||||||||
|
System sales
|
6.693
|
6.422
|
13.032
|
12.347
|
|||||||||
|
Off-system sales
|
0.202
|
0.305
|
0.339
|
0.495
|
|||||||||
|
Total sales
|
6.895
|
6.727
|
13.371
|
12.842
|
|||||||||
|
Number of customers
|
779,359
|
773,436
|
779,359
|
773,436
|
|||||||||
|
Average cost of energy per KWH (C) – cents
|
|||||||||||||
|
Natural gas
|
4.503
|
3.310
|
5.050
|
3.519
|
|||||||||
|
Coal
|
1.916
|
1.778
|
1.858
|
1.659
|
|||||||||
|
Total fuel
|
2.832
|
2.340
|
3.049
|
2.285
|
|||||||||
|
Total fuel and purchased power
|
3.127
|
2.624
|
3.334
|
2.601
|
|||||||||
|
Degree days (D)
|
|||||||||||||
|
Heating - Actual
|
158
|
254
|
2,298
|
1,929
|
|||||||||
|
Heating - Normal
|
236
|
236
|
2,199
|
2,199
|
|||||||||
|
Cooling - Actual
|
737
|
637
|
745
|
660
|
|||||||||
|
Cooling - Normal
|
547
|
547
|
555
|
555
|
|||||||||
|
(A) Sales to other utilities and power marketers.
(B) Megawatt-hour.
(C) Kilowatt-hour.
(D) Degree days are calculated as follows: The high and low degrees of a particular day are added together and then averaged. If the calculated average is above 65 degrees, then the difference between the calculated average and 65 is expressed as cooling degree days, with each degree of difference equaling one cooling degree day. If the calculated average is below 65 degrees, then the difference between the calculated average and 65 is expressed as heating degree days, with each degree of difference equaling one heating degree day. The daily calculations are then totaled for the particular reporting period.
|
|||||||||||||
|
Ÿ
|
increased price variance, which included revenues from various rate riders, including the Windspeed rider, the OU Spirit rider, the Smart Grid rider and the system hardening rider, and higher revenues from the sales and customer mix, which increased the gross margin by approximately $26.7 million;
|
|
Ÿ
|
the $48.3 million Oklahoma rate increase in which the majority of the annual increase is recovered during the summer months, which increased the gross margin by approximately $14.9 million;
|
|
Ÿ
|
warmer weather in OG&E’s service territory, which increased the gross margin by approximately $1.8 million;
|
|
Ÿ
|
revenues from the Arkansas rate increase, which increased the gross margin by approximately $1.4 million; and
|
|
Ÿ
|
new customer growth in OG&E’s service territory, which increased the gross margin by approximately $1.4 million.
|
|
Ÿ
|
an increase of approximately $8.0 million in contract technical and construction services expense primarily attributable to increased spending for ongoing maintenance at some of OG&E’s power plants in the second quarter of 2010 as compared to the same period in 2009;
|
|
Ÿ
|
an increase of approximately $7.0 million in employee benefits expense primarily due to a reclassification in May 2009 of 2006 and 2007 pension settlement costs to a regulatory asset, as prescribed in the Arkansas rate case settlement, an increase in postretirement benefits due to an increase in medical costs and changes in actuarial assumptions in 2010 and an increase in pension expense due to a decrease in the amount
|
|
Ÿ
|
an increase of approximately $2.3 million in intercompany allocations due to increased spending at the holding company;
|
|
Ÿ
|
an increase of approximately $2.0 million in salaries and wages expense primarily due to salary increases in 2010 and increased overtime expense due to storms in May 2010; and
|
|
Ÿ
|
an increase of approximately $1.9 million due to increased spending on vegetation management related to system hardening, which expenses are being recovered through a rider.
|
|
Ÿ
|
increased price variance, which included revenues from various rate riders, including the Windspeed rider, the OU Spirit rider, the Smart Grid rider and the system hardening rider, and higher revenues from the sales and customer mix, which increased the gross margin by approximately $36.3 million;
|
|
Ÿ
|
the $48.3 million Oklahoma rate increase in which the majority of the annual increase is recovered during the summer months, which increased the gross margin by approximately $18.9 million;
|
|
Ÿ
|
cooler weather in the first quarter of 2010 and warmer weather in the second quarter of 2010 in OG&E’s service territory, which increased the gross margin by approximately $13.4 million;
|
|
Ÿ
|
revenues from the Arkansas rate increase, which increased the gross margin by approximately $3.5 million; and
|
|
Ÿ
|
new customer growth in OG&E’s service territory, which increased the gross margin by approximately $3.0 million.
|
|
Ÿ
|
an increase of approximately $11.5 million in contract technical and construction services attributable to increased spending for ongoing maintenance at some of OG&E’s power plants in the first half of 2010 as compared to the same period in 2009;
|
|
Ÿ
|
an increase of approximately $10.0 million in employee benefits expense primarily due to an increase in postretirement benefits due to an increase in medical costs and changes in actuarial assumptions in 2010, a reclassification in May 2009 of 2006 and 2007 pension settlement costs to a regulatory asset, as prescribed in the Arkansas rate case settlement, and an increase in pension expense due to a decrease in the amount deferred as a pension regulatory asset in OG&E’s Oklahoma jurisdiction resulting from OG&E’s 2009 Oklahoma rate case;
|
|
Ÿ
|
an increase of approximately $6.8 million in salaries and wages expense primarily due to salary increases in 2010, increased incentive compensation expense and increased overtime expense due to the storms in January and May 2010;
|
|
Ÿ
|
an increase of approximately $2.6 million in intercompany allocations due to increased spending at the holding company;
|
|
Ÿ
|
an increase of approximately $2.4 million due to increased spending on vegetation management related to system hardening, which expenses are being recovered through a rider; and
|
|
Ÿ
|
an increase of approximately $1.7 million in injuries and damages.
|
|
Ÿ
|
an increase of approximately $3.4 million in capitalized labor primarily due to certain January and May 2010 storm costs being recorded as a regulatory asset as Deferred Storm Expenses (see Note 1) and certain costs being capitalized in conjunction with OG&E’s Smart Grid Program during the first half of 2010; and
|
|
Ÿ
|
a decrease of approximately $1.2 million due to lower bad debt expense.
|
|
Transportation
|
Gathering
|
|||||||||||
|
Three Months Ended
|
and
|
and
|
||||||||||
|
June 30, 2010
|
Storage
|
Processing
|
Eliminations
|
Total
|
||||||||
|
(In millions)
|
||||||||||||
|
Operating revenues
|
$
|
97.1
|
$
|
235.4
|
$
|
(62.5)
|
$
|
270.0
|
||||
|
Cost of goods sold
|
60.9
|
168.6
|
(62.5)
|
167.0
|
||||||||
|
Gross margin on revenues
|
36.2
|
66.8
|
---
|
103.0
|
||||||||
|
Other operation and maintenance
|
12.6
|
23.5
|
---
|
36.1
|
||||||||
|
Depreciation and amortization
|
5.4
|
12.5
|
---
|
17.9
|
||||||||
|
Taxes other than income
|
3.4
|
1.6
|
---
|
5.0
|
||||||||
|
Operating income
|
$
|
14.8
|
$
|
29.2
|
$
|
---
|
$
|
44.0
|
||||
|
Transportation
|
Gathering
|
|||||||||||
|
Three Months Ended
|
and
|
and
|
||||||||||
|
June 30, 2009
|
Storage
|
Processing
|
Eliminations
|
Total
|
||||||||
|
(In millions)
|
||||||||||||
|
Operating revenues
|
$
|
101.0
|
$
|
142.3
|
$
|
(52.4)
|
$
|
190.9
|
||||
|
Cost of goods sold
|
60.7
|
98.7
|
(52.4)
|
107.0
|
||||||||
|
Gross margin on revenues
|
40.3
|
43.6
|
---
|
83.9
|
||||||||
|
Other operation and maintenance
|
9.7
|
19.9
|
---
|
29.6
|
||||||||
|
Depreciation and amortization
|
5.3
|
10.6
|
---
|
15.9
|
||||||||
|
Impairment of assets
|
0.8
|
0.3
|
---
|
1.1
|
||||||||
|
Taxes other than income
|
3.2
|
1.5
|
---
|
4.7
|
||||||||
|
Operating income
|
$
|
21.3
|
$
|
11.3
|
$
|
---
|
$
|
32.6
|
||||
|
Transportation
|
Gathering
|
|||||||||||
|
Six Months Ended
|
and
|
and
|
||||||||||
|
June 30, 2010
|
Storage
|
Processing
|
Eliminations
|
Total
|
||||||||
|
(In millions)
|
||||||||||||
|
Operating revenues
|
$
|
208.2
|
$
|
483.3
|
$
|
(137.3)
|
$
|
554.2
|
||||
|
Cost of goods sold
|
127.1
|
348.6
|
(137.3)
|
338.4
|
||||||||
|
Gross margin on revenues
|
81.1
|
134.7
|
---
|
215.8
|
||||||||
|
Other operation and maintenance
|
23.6
|
44.8
|
---
|
68.4
|
||||||||
|
Depreciation and amortization
|
10.8
|
24.9
|
---
|
35.7
|
||||||||
|
Taxes other than income
|
7.3
|
3.5
|
---
|
10.8
|
||||||||
|
Operating income
|
$
|
39.4
|
$
|
61.5
|
$
|
---
|
$
|
100.9
|
||||
|
Transportation
|
Gathering
|
|||||||||||
|
Six Months Ended
|
and
|
and
|
||||||||||
|
June 30, 2009
|
Storage
|
Processing
|
Eliminations
|
Total
|
||||||||
|
(In millions)
|
||||||||||||
|
Operating revenues
|
$
|
209.3
|
$
|
280.8
|
$
|
(109.1)
|
$
|
381.0
|
||||
|
Cost of goods sold
|
126.9
|
194.8
|
(109.1)
|
212.6
|
||||||||
|
Gross margin on revenues
|
82.4
|
86.0
|
---
|
168.4
|
||||||||
|
Other operation and maintenance
|
19.6
|
43.0
|
---
|
62.6
|
||||||||
|
Depreciation and amortization
|
10.0
|
20.7
|
---
|
30.7
|
||||||||
|
Impairment of assets
|
0.8
|
0.3
|
---
|
1.1
|
||||||||
|
Taxes other than income
|
6.8
|
2.8
|
---
|
9.6
|
||||||||
|
Operating income
|
$
|
45.2
|
$
|
19.2
|
$
|
---
|
$
|
64.4
|
||||
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
June 30,
|
June 30,
|
|||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||
|
Gathered volumes – TBtu/d (A)
|
1.33
|
1.25
|
1.30
|
1.25
|
||||||||
|
Incremental transportation volumes – TBtu/d (B)
|
0.41
|
0.57
|
0.44
|
0.49
|
||||||||
|
Total throughput volumes – TBtu/d
|
1.74
|
1.82
|
1.74
|
1.74
|
||||||||
|
Natural gas processed – TBtu/d
|
0.83
|
0.70
|
0.78
|
0.67
|
||||||||
|
NGLs sold (keep-whole) – million gallons
|
50
|
26
|
92
|
48
|
||||||||
|
NGLs sold (purchased for resale) – million gallons
|
121
|
85
|
220
|
154
|
||||||||
|
NGLs sold (percent-of-liquids) – million gallons
|
8
|
9
|
15
|
17
|
||||||||
|
Total NGLs sold – million gallons
|
179
|
120
|
327
|
219
|
||||||||
|
Average sales price per gallon
|
$
|
0.86
|
$
|
0.66
|
$
|
0.94
|
$
|
0.64
|
||||
|
Estimated realized keep-whole spreads (C)
|
$
|
4.74
|
$
|
3.50
|
$
|
5.21
|
$
|
3.20
|
||||
|
Ÿ
●
|
lower crosshaul volumes as fewer customers moved natural gas to eastern markets in the second quarter of 2010 as there were smaller differences in natural gas prices at various U.S. market locations, which decreased the gross margin by approximately $3.3 million; and
|
|
Ÿ
●
|
an increase in the imbalance liability, net of fuel recoveries and natural gas length positions, which decreased the gross margin by approximately $1.6 million.
|
|
Ÿ
|
increased gross margin on keep-whole processing of approximately $12.0 million;
|
|
Ÿ
|
increased fixed processing fees of approximately $4.1 million; and
|
|
Ÿ
|
increased gross margin on NGLs retained under percent-of-liquids (“POL”) contracts of approximately $3.0 million.
|
|
Ÿ
|
an increase in condensate revenues associated with the gathering and processing operations due to increases in prices and volumes as a result of several new expansion projects with higher GPM gas, which increased the gross margin by approximately $2.7 million; and
|
|
Ÿ
|
increased gathering volumes associated with expansion projects, which increased the gathering fees by approximately $1.6 million.
|
|
Ÿ
|
decreased crosshaul volumes as fewer customers moved natural gas to eastern markets in the first half of 2010 as there were smaller differences in natural gas prices at various U.S. market locations, which decreased the gross margin by approximately $7.4 million;
|
|
Ÿ
|
an increase in the imbalance liability, net of fuel recoveries and natural gas length positions, which decreased the gross margin by approximately $2.4 million;
|
|
Ÿ
|
lower realized margins on operational storage hedges as the result of lower transacted volumes during the first half of 2010 as compared to the same period in 2009, which decreased the gross margin by approximately $2.3 million; and
|
|
Ÿ
|
decreased low/high pressure revenues due to a customer shipping its production through the Section 311 firm East side service, which decreased the gross margin by approximately $1.1 million.
|
|
Ÿ
|
capacity lease service under the MEP and Gulf Crossing capacity leases that were placed into service in June 2009 that increased transportation fees by approximately $6.3 million;
|
|
Ÿ
|
no adjustment of natural gas storage inventory during the first half of 2010 as compared to an approximate $5.8 million lower of cost or market adjustment to the natural gas storage inventory during the six months ended June 30, 2009 due to lower natural gas prices; and
|
|
Ÿ
|
implementation of the Section 311 firm East side service in April 2009 that increased transportation fees by approximately $1.1 million, net of an approximate $1.5 million refund for the second quarter 2010 service outage as maintenance activities were being conducted.
|
|
Ÿ
|
increased gross margin on keep-whole processing of approximately $17.9 million;
|
|
Ÿ
|
increased fixed processing fees of approximately $8.2 million; and
|
|
Ÿ
|
increased gross margin on NGLs retained under POL contracts of approximately $6.6 million.
|
|
Ÿ
|
an increase in condensate revenues associated with the gathering and processing operations due to increases in prices and volumes as a result of cooler weather in the first quarter of 2010 and several new expansion projects with higher GPM gas, which increased the gross margin by approximately $9.1 million;
|
|
Ÿ
|
higher volumes and realized margin on sales of physical natural gas long/short positions associated with gathering operations, which increased the gross margin by approximately $5.5 million, net of imbalance and fuel tracker obligations; and
|
|
Ÿ
|
increased gathered volumes associated with expansion projects, which increased the gathering fees by approximately $2.1 million.
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
June 30,
|
June 30,
|
|||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||
|
(In millions)
|
||||||||||||
|
Operating revenues
|
$
|
189.0
|
$
|
117.2
|
$
|
434.7
|
$
|
309.5
|
||||
|
Cost of goods sold
|
192.9
|
116.6
|
437.2
|
304.4
|
||||||||
|
Gross margin on revenues
|
(3.9)
|
0.6
|
(2.5)
|
5.1
|
||||||||
|
Other operation and maintenance
|
2.1
|
2.7
|
4.8
|
5.3
|
||||||||
|
Taxes other than income
|
---
|
0.1
|
0.2
|
0.3
|
||||||||
|
Operating loss
|
$
|
(6.0)
|
$
|
(2.2)
|
$
|
(7.5)
|
$
|
(0.5)
|
||||
|
●
|
smaller differences in natural gas prices at various U.S. market locations which resulted in a reduced spread that OERI was able to realize from delivering gas under its transportation contracts, which decreased the gross margin from transportation by approximately $5.1 million; and
|
|
●
|
lower realized gains on storage withdrawals, which decreased the gross margin by approximately $1.5 million.
|
|
(In millions)
|
Six Months Ended
June 30, 2010
Ongoing Earnings
|
Medicare Part D
Tax Subsidy
|
Six Months Ended
June 30, 2010
GAAP Net Income
|
Six Months Ended
June 30,
2009
GAAP and
Ongoing
Net Income (A)
|
||||||||
|
OG&E
|
$
|
68.2
|
$
|
(7.0)
|
$
|
61.2
|
$
|
57.7
|
||||
|
Enogex
|
51.7
|
(2.0)
|
49.7
|
31.4
|
||||||||
|
Holding Company
|
(7.0)
|
(2.4)
|
(9.4)
|
(1.8)
|
||||||||
|
Consolidated
|
$
|
112.9
|
$
|
(11.4)
|
$
|
101.5
|
$
|
87.3
|
||||
|
(A) There were no one-time charges for the six months ended June 30, 2009 therefore, ongoing and GAAP net income are the same.
|
|
(In millions)
|
Six Months Ended
June 30, 2010
Ongoing EPS
|
Medicare Part D
Tax Subsidy
|
Six Months Ended
June 30, 2010
GAAP EPS
|
Six Months Ended
June 30,
2009
GAAP and Ongoing
EPS (B)
|
||||||||
|
OG&E
|
$
|
0.69
|
$
|
(0.07)
|
$
|
0.62
|
$
|
0.60
|
||||
|
Enogex
|
0.52
|
(0.02)
|
0.50
|
0.33
|
||||||||
|
Holding Company
|
(0.07)
|
(0.02)
|
(0.09)
|
(0.02)
|
||||||||
|
Consolidated
|
$
|
1.14
|
$
|
(0.11)
|
$
|
1.03
|
$
|
0.91
|
||||
|
Ÿ
|
the financial performance of Enogex’s assets without regard to financing methods, capital structure or historical cost basis;
|
|
Ÿ
|
Enogex’s operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to financing or capital structure; and
|
|
Ÿ
|
the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
|
(In millions)
|
2010
|
2009
|
2010
|
2009
|
|||||||||
|
Net income attributable to Enogex LLC
|
$
|
22.3
|
$
|
16.0
|
$
|
49.7
|
$
|
31.4
|
|||||
|
Add:
|
|||||||||||||
|
Interest expense, net
|
7.2
|
6.4
|
15.4
|
12.2
|
|||||||||
|
Income tax expense
|
13.9
|
9.8
|
34.2
|
19.5
|
|||||||||
|
Depreciation and amortization
|
17.9
|
15.9
|
35.7
|
30.7
|
|||||||||
|
EBITDA
|
$
|
61.3
|
$
|
48.1
|
$
|
135.0
|
$
|
93.8
|
|||||
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
(In millions)
|
2010
|
2009
|
||||
|
Net cash provided from operating activities
|
$
|
341.5
|
$
|
186.9
|
||
|
Net cash used in investing activities
|
(291.6)
|
(472.9)
|
||||
|
Net cash (used in) provided from financing activities
|
(100.7)
|
323.8
|
||||
|
Ÿ
|
an increase in cash receipts for sales at Enogex and OERI due to an increase in natural gas prices and NGLs prices and volumes in the first half of 2010 as compared to the same period in 2009;
|
|
Ÿ
|
an income tax refund received in February 2010 related to a carry back of the 2008 tax loss resulting from a change in tax method of accounting for capitalization of repairs expense;
|
|
Ÿ
|
a cash collateral payment to counterparties of OERI related to OERI’s NGLs hedge positions in the first half of 2009; and
|
|
Ÿ
|
cash received in the first half of 2010 from the implementation of rate increases and riders at OG&E.
|
|
Ÿ
|
an increase in payments for purchases at Enogex and OERI due to an increase in natural gas prices and NGLs prices and volumes in the first half of 2010 as compared to the same period in 2009; and
|
|
Ÿ
|
higher fuel refunds at OG&E in the first half of 2010 as compared to the same period in 2009.
|
|
Ÿ
|
repayment of the remaining balance of Enogex’s $400 million 8.125% senior notes which matured on January 15, 2010;
|
|
Ÿ
|
a decrease in short-term debt borrowings in the first half of 2010;
|
|
Ÿ
|
a decrease in the issuance of common stock in the first half of 2010; and
|
|
Ÿ
|
proceeds received from the issuance of $200 million of long-term debt at Enogex in June 2009.
|
|
Less than
|
|||||||||||||||
|
1 year
|
1-3 years
|
3-5 years
|
More than
|
||||||||||||
|
(In millions)
|
(2010)
|
(2011-2012)
|
(2013-2014)
|
5 years
|
Total
|
||||||||||
|
OG&E Base Transmission
|
$
|
45
|
$
|
40
|
$
|
35
|
$
|
20
|
$
|
140
|
|||||
|
OG&E Base Distribution
|
215
|
465
|
460
|
230
|
1,370
|
||||||||||
|
OG&E Base Generation
|
50
|
70
|
70
|
35
|
225
|
||||||||||
|
OG&E Other
|
25
|
50
|
50
|
25
|
150
|
||||||||||
|
Total OG&E Base Transmission, Distribution,
|
|||||||||||||||
|
Generation and Other
|
335
|
625
|
615
|
310
|
1,885
|
||||||||||
|
OG&E Known and Committed Projects:
|
|||||||||||||||
|
Transmission Projects:
|
|||||||||||||||
|
Sunnyside-Hugo (345 kV)
|
25
|
175
|
---
|
---
|
200
|
||||||||||
|
Sooner-Rose Hill (345 kV)
|
15
|
45
|
---
|
---
|
60
|
||||||||||
|
Windspeed (345 kV)
|
25
|
---
|
---
|
---
|
25
|
||||||||||
|
Balanced Portfolio 3E Projects
|
10
|
205
|
120
|
---
|
335
|
||||||||||
|
SPP Priority Projects (A)
|
---
|
230
|
100
|
---
|
330
|
||||||||||
|
Total Transmission Projects
|
75
|
655
|
220
|
---
|
950
|
||||||||||
|
Other Projects:
|
|||||||||||||||
|
Smart Grid Program (B)
|
40
|
120
|
60
|
10
|
230
|
||||||||||
|
Crossroads (C)
|
160
|
290
|
---
|
---
|
450
|
||||||||||
|
System Hardening
|
10
|
25
|
---
|
---
|
35
|
||||||||||
|
OU Spirit
|
10
|
---
|
---
|
---
|
10
|
||||||||||
|
Other
|
15
|
25
|
---
|
---
|
40
|
||||||||||
|
Total Other Projects
|
235
|
460
|
60
|
10
|
765
|
||||||||||
|
Total OG&E Known and Committed Projects
|
310
|
1,115
|
280
|
10
|
1,715
|
||||||||||
|
Total OG&E (D)
|
645
|
1,740
|
895
|
320
|
3,600
|
||||||||||
|
Enogex (Base Maintenance and Known
|
|||||||||||||||
|
and Committed Projects)
|
205
|
180
|
90
|
45
|
520
|
||||||||||
|
OGE Energy and OERI
|
20
|
50
|
50
|
25
|
145
|
||||||||||
|
Total capital expenditures
|
$
|
870
|
$
|
1,970
|
$
|
1,035
|
$
|
390
|
$
|
4,265
|
|||||
|
(C) These capital expenditures assume the 227.5 MW configuration.
|
|
Revolving Credit Agreements and Available Cash
|
||||||||
|
Aggregate
|
Amount
|
Weighted-Average
|
||||||
|
Entity
|
Commitment
|
Outstanding
|
Interest Rate
|
Maturity
|
||||
|
(In millions)
|
||||||||
|
OGE Energy
|
$
|
596.0
|
$
|
112.9
|
0.38%
|
December 6, 2012
|
||
|
OG&E
|
389.0
|
9.5
|
---%
|
December 6, 2012
|
||||
|
Enogex
|
250.0
|
65.0
|
0.66%
|
March 31, 2013
|
||||
|
1,235.0
|
187.4
|
0.46%
|
||||||
|
Cash
|
7.3
|
N/A
|
N/A
|
N/A
|
||||
|
Total
|
$
|
1,242.3
|
$
|
187.4
|
0.46%
|
|||
|
June 30
(In millions)
|
2010
|
2009
|
||||
|
Commodity market risk, net
|
$
|
0.1
|
$
|
0.3
|
||
|
June 30
(In millions)
|
2010
|
2009
|
||||
|
Commodity market risk, net
|
$
|
10.9
|
$
|
4.9
|
||
|
Approximate Dollar
|
||||||||
|
Total Number of
|
Value of Shares that
|
|||||||
|
Shares Purchased as
|
May Yet Be
|
|||||||
|
Total Number of
|
Average Price Paid
|
Part of Publicly
|
Purchased Under the
|
|||||
|
Period
|
Shares Purchased
|
per Share
|
Announced Plan
|
Plan
|
||||
|
4/1/10 – 4/30/10
|
17,100
|
$
|
38.58
|
N/A
|
N/A
|
|||
|
5/1/10 – 5/31/10
|
114,100
|
$
|
38.12
|
N/A
|
N/A
|
|||
|
6/1/10 – 6/30/10
|
34,400
|
$
|
36.15
|
N/A
|
N/A
|
|||
|
3.01
|
OGE Energy Corp. Restated Certificate of Incorporation.
|
|
|
3.02
|
OGE Energy Corp. Amended By-laws dated May 20, 2010.
|
|
|
4.01
|
Supplemental Indenture No. 11 dated as of June 1, 2010 between OG&E and UMB Bank, N.A., as trustee, creating the Senior Notes. (Filed as Exhibit 4.01 to OG&E’s Form 8-K filed June 8, 2010 (File No. 1-1097) and incorporated by reference herein)
|
|
|
31.01
|
Certifications Pursuant to Rule 13a-14(a)/15d-14(a) As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.01
|
Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
99.01
|
Copy of Settlement Agreement with Oklahoma Corporation Commission Staff, the Oklahoma Attorney General and others relating to OG&E’s Smart Grid application. (Filed as Exhibit 99.02 to OGE Energy’s Form 8-K filed June 1, 2010 (File No. 1-12579) and incorporated by reference herein)
|
|
|
99.02
|
Copy of Settlement Agreement with Oklahoma Corporation Commission Staff, the Oklahoma Attorney General and others relating to OG&E’s Crossroads application. (Filed as Exhibit 99.01 to OGE Energy’s Form 8-K filed July 1, 2010 (File No. 1-12579) and incorporated by reference herein)
|
|
|
99.03
|
Copy of OCC Order with Oklahoma Corporation Commission Staff, the Oklahoma Attorney General and others relating to OG&E’s Smart Grid application. (Filed as Exhibit 99.02 to OGE Energy’s Form 8-K filed July 7, 2010 (File No. 1-12579) and incorporated by reference herein)
|
|
|
99.04
|
Copy of OCC Order with Oklahoma Corporation Commission Staff, the Oklahoma Attorney General and others relating to OG&E’s Crossroads application.
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Schema Document.
|
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document.
|
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Definition Linkbase Document.
|
|
OGE ENERGY CORP.
|
|
|
(Registrant)
|
|
|
By
|
/s/ Scott Forbes
|
|
Scott Forbes
|
|
|
Controller and Chief Accounting Officer
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|